Lee Hae-jin, founder and former chairman of South Korea’s internet portal giant Naver Corp., has sold off his shares in the company to reduce his stake to 3.72 percent ahead of the government’s announcement of the list of chaebol entities (major conglomerates) subject for tougher scrutiny in tax and other business regulations by state offices.
Naver announced in a disclosure on Wednesday that Lee sold 195,000 shares in the company at around 15 million won ($138.5 million), or 772,644 won per share, after the market closed on Tuesday. The per-share price was a 3.9 percent discount from Tuesday’s closing price of 804,000 won. Following the disposal, Lee’s stock holding in Naver was reduced from 4.31 percent to 3.72 percent.
The stock selloff comes after Lee on Monday officially stepped down from the company’s board to focus on the firm’s global business as a global investment officer (GIO), stoking speculation that Lee has made the latest moves to avoid Naver’s designation as a large conglomerate by the country’s Fair Trade Commission (FTC) scheduled in May.
Last year, Lee protested the FTC’s decision to designate him as an “owner” of Naver by making a rare appearance at the antitrust agency to argue that he is a mere professional corporate manager of the company holding a small stake. The company and Lee have also demanded that Naver should be categorized as an “ownerless corporation” like KT or Posco.
The FTC, however, dismissed his claims in September last year and designated Naver as a large corporation and Lee as the effective owner, saying he still could exercise substantial control over the company with his stake of 4.31 percent, and he was the only board member with a large stake in the firm.
Naver said on Wednesday that Lee sold the stake for personal reasons and the sale is not linked to the FTC designation.
FTC annually reviews the asset of large conglomerates and amends its watch list for chaebol entities. Under Korea’s antitrust guidelines, companies whose assets exceed 5 trillion won have to join the watch list and face more stringent regulations, including limits on inter-affiliate transactions and mandatory disclosures for all units. Following last year’s decision by the antitrust watchdog, Naver has become obligated to publicly disclose important business issues related to its 71 units.
By Seo Dong-chul and Choi Mira
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