- First case of NPS standing in favor of an inside director appointment from a shareholder proposal, fostering a new environment for enhancing shareholder value
- Park confident in prospects for candidate nomination for audit committee through shareholder proposal for 2022 annual general meeting of shareholders
- Global experts and media express positive views towards Park's campaign which took into consideration the societal context
SEOUL, South Korea, March 24, 2021 /PRNewswire/ -- Chul Whan Park, a senior executive and the largest individual shareholder of Kumho Petrochemical, welcomed the unprecedented decision by NPS to vote for his appointment as an inside director which was part of his shareholder proposal.
In response to NPS' decision to support his role in oversight by addressing the need to hold the current management under control, Park said "The biggest priority of my shareholder proposals has always been the strengthening of the board's role to monitor and oversee management. I see this as a positive development which has paved the way for further improving the fundamental governance of Kumho Petrochemical."
This is a first ever case in Korea for NPS to vote in favor of appointing an inside director as part of a shareholder proposal. "This decision is the first signal that shareholders' voices are being heard, with the growing number of Korea's individual shareholders reaching eight million," said Park. "In light of this, all our shareholders in Korea including myself, look forward to seeing NPS fully carry out its stewardship code for enhancing the company's long-term corporate value."
On online forums and communities, individual shareholders of Kumho Petrochemical continued to express their support for the rationale and detailed recommendations of Park's shareholder proposal, who added, "I am more than grateful to see such wide support from our fellow shareholders for the pursuit of enhanced corporate and shareholder value. With such forward-thinking and support from our shareholders, the company will be able to move forward towards a brighter future, and I will carry on my effort to increase the corporate value and strengthen the company's shareholder return policy as well."
Park also showed confidence that he will be able to drive the appointment of audit committee members who would be able to thoroughly monitor the management for the next annual general meeting in 2022.
However, Park expressed mild disappointment towards some of the NPS' decisions. "It was disappointing to see that NPS evaluated this shareholder's proposal, which is aimed to improve the governance of the existing board of directors while looking for strategic and financial future growth engines, within the framework of management dispute," added Park. "NPS should have taken a more serious consideration of how the board of directors has failed to serve its role of overseeing and keeping the current management in check."
Also, Park added that the acquisition of Kumho Resort, excessive holding of treasury stocks and other malpractices that led to stagnant shareholder value all originate from governance issues. As for the Kumho Resort acquisition, the company would need to pay KRW 700 billion, accounting for the debt payments. For the company to pursue this acquisition while opposing the shareholder dividend proposal, which would return KRW 190 billion more to shareholders compared to the company's dividend plan, is an act against the shareholder return policy and does not take into account the interests of minority shareholders.
Moreover, Park emphasized that NPS should closely examine and reflect on the grounds for the support of Park and his shareholder proposed agenda items announced by Norges Bank Investment Management (NBIM) and California Public Employees' Retirement System (CalPERS), as both institutional investors are globally renowned for incorporating best market practices in their voting decisions.
Park emphasized, "NPS' voting decision implies their expectations of me to play an important role in improving the company's governance and further enhancing the corporate value. I will not settle for a single victory, but instead continue to strive for long-term shareholder value with the support of all our fellow shareholders."
