The state-run Industrial Bank of Korea (IBK) will vote against the reappointment of KT&G Corp.’s current chief Baek Bok-in during a shareholders meeting next week, citing Baek’s alleged double bookkeeping activity and unfair nomination process.
IBK, the second-largest single shareholder of the South Korean tobacco maker KT&G with a 6.93 percent stake, plans to urge other investors including largest single shareholder National Pension Service (NPS) with a 9.09 percent stake ownership to support its move.
According to multiple industry sources on Monday, IBK has proposed for a conference call with Institutional Shareholder Services (ISS), a global proxy advisory firm that analyzes shareholder agendas of global companies and issues opinionated reports. Investors across the world often refer to ISS’s opinion before exercising votes. Foreign investors have a combined 53.13 percent stake ownership in KT&G as of March 2, and their votes will determine the result in the upcoming shareholders meeting on March 16.
In the conference call, IBK is expected to explain why it opposes the reelection of KT&G chief Baek and ask for support to appoint an outside director. Apart from the conference call with ISS, IBK plans to meet with NPS and other institutional investors this week to seek further support.
IBK’s move comes after it asked KT&G to explain and correct the nomination procedure of its current chief in late January citing unfairness and delivered its opposition against Back’s reelection, citing suspicions raised over double bookkeeping.
KT&G, however, did not accept IBK’s request. Since then, the state-run bank has recommended the company hire two outside directors - Soongsil University Professor O Cheol-ho and lawyer Hwang Duk-hee and waiting for the decision.
By Kim Tae-sung and Lee Eun-joo
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]