[THE INVESTOR] South Korea’s major companies will hold regular shareholders meetings on March 18 to vote on such matters as reinstating a group chair as an in-house director, but some of them are facing the aftermath of the Choi Soon-sil scandal.
Global and local proxy firms have spoken out against the re-election of some leaders who are part of board of directors, citing their involvement in the ongoing political scandal of former President Park Geun-hye.
A total of 178 companies are slated to hold shareholders meetings on March 18, according to the Financial Supervisory Service. The shareholders are to vote on various agenda such as the re-election of in-house directors along with the approval of financial statements and the appointment of outside directors.
Local proxy advisory Sustinvest questioned one of the planned meetings that will involve voting to rename Hyundai Motor Group Chairman Chung Mong-koo as an in-house director, citing Chung’s alleged role in the group donating funds to dubious foundations run by the former president’s friend Choi.
The world’s leading proxy advisory firm Institutional Shareholder Services and Glass Lewis sent a message warning clients to wait and see regarding the impact of Samsung’s involvement in the scandal, which has put the companies involved on alert.
“Shareholders and related officials are keeping a close watch on proxy advisory firms as they have an influence on foreigners, who hold significant shares of major companies such as Hyundai Motor and Hyundai Mobis,” an industry insider said.
The Center for Good Corporate Governance, a local proxy advisory firm, and Sustinvest also opposed Huh Tae-soo, vice chairman of GS Homeshopping, and GS Retail President Huh Yeon-soo taking in-house director posts, citing donations made to Choi’s Mir and K-sports foundations.
“Even though they might have been forced to make donations, the two are responsible for using company money unjustly and for damaging the company’s reputation as a result of the collusive links between politics and business,” CGCG said.
Sustinvest also questioned KT Chairman Hwang Chang-kyu’s role in the hiring of an acquaintance of Cha Eun-taek for a high-ranking marketing post at South Korea’s leading mobile carrier KT. Cha is a TV commercial director and an associate of Choi
The proxy firm also mentioned that KT handed over advertisements worth 6.8 billion won ($6 million) to a company run by Choi.
KT is expected to hold a shareholders meeting on March 24.
Meanwhile, South Korea’s No. 1 cosmetics maker Amorepacific and other local cosmetics companies are also scheduled to hold shareholders meetings on March 18. Business prospects for this year are expected to take center stage.
By Kim Bo-gyung/The Korea Herald (firstname.lastname@example.org)