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The Korea Herald
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THE INVESTOR
March 28, 2024

Economy

NPS’ ‘rubber stamp’ tendency continues this year

  • PUBLISHED :March 19, 2017 - 16:59
  • UPDATED :March 19, 2017 - 16:59
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[THE INVESTOR] South Korea’s state pension fund has changed little in playing a “rubber stamp” role this year when it comes to exercising its voting rights in major conglomerates’ shareholders meetings.

The latest was when the National Pension Service decided to abstain from voting at a general shareholders meeting of Hyundai Motor Group on March 17 to re-elect Chairman Chung Mong-koo as an in-house director.




Chung’s re-election had been opposed by the Center for Good Corporate Governance. The institute said Chung’s 2008 conviction record on negligence of duty and embezzlement might hurt the carmaker’s business as well as provoke conflicts of interest with other affiliates such as Hyundai Glovis.

Regardless of the outcome on Chung, who retained the board seat, the NPS’ abstinence on voting failed to clear the fund from criticism that the nation’s largest institutional investor tends to play it safe when it comes to socially and economically sensitive issues, observers said.

The NPS also voted neutral to the renomination of Kwon Oh-joon as the chairman of leading steelmaker Posco for a three-year term, on March 10.

The renomination of Kwon had been controversial due to his alleged involvement in the influence-peddling scandal involving Choi Soon-sil, a longtime friend of former President Park Geun-hye. Choi’s close associate Cha Eun-taek allegedly used his ties with Choi and senior government officials to put pressure on a small ad agency, which had acquired Poreka from Posco, to hand over 80 percent of its shares.

The NPS is also under investigation due to its support for the 2015 merger between Samsung C&T and Cheil Industries, despite criticism that it overlooked the interest of shareholders as well as general Korean workers who mandatorily subscribe to the pension fund.

Last year, the NPS rarely voted against motions at general shareholders meetings. The pension fund voted for 2,715 motions, or 89 percent of the 3,035 cases in total last year. It voted against 306 motions. The remaining 14 involved either abstention or voting neutral.

By Kim Yoon-mi/The Korea Herald
(yoonmi@heraldcorp.com)

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