An Uncle-nephew Confrontation
The uncle-nephew dispute over managerial control at Kumho Petrochemical is expected to be resolved at the company’s shareholders' meeting in March.
According to the Financial Supervisory Service's electronic public disclosure system, Park Chul-wan, a managing director of Kumho Petrochemical filed an application for an injunction with the Central District Court on Feb. 6 for perusal and copying of the list of shareholders.
An application for the perusal of a shareholder list is usually one of the steps taken in a dispute over management rights. Park is expected to launch efforts to attract shareholders friendly with him for a vote showdown at the scheduled general shareholders' meeting in March.
"We will respond to the managing director’s move in accordance with the legal procedure," a company official said. The date of the general shareholders' meeting has not yet been disclosed, but it is expected to take place in March as usual. The company will hold a board meeting in early March to announce convocation of the general shareholders’ meeting.
Meanwhile, Park Chul-wan is the eldest son of the late Kumho Group chairman Park Jung-gu. Kumho Petrochemical chairman Park Chan-koo is his youngest uncle.
In late January, Park Chul-wan announced the termination of a joint shareholding relationship with his uncle and reportedly made shareholder proposals to the company including the recommendation of internal and external directors and auditors and the expansion of dividend payouts. Park Chul-wan is the largest shareholder of the company with a 10 percent stake. Kumho Petrochemical chairman Park Chan-gu holds a 6.69 percent stake, and his son, Park Joon-kyung, a senior executive director of the company, a 7.17 percent stake and his daughter, Park Joo-hyung, also an executive director of the company, a 0.98 percent stake. The National Pension Fund holds a 7.91 percent stake. The Employee Stock Ownership Program holds an 18.4 percent stake. The program usually does not have voting rights, but when its stake is sold off to friendly forces, its voting rights can be revived and used to defend management rights.
Securities industry analysts say that 48.7 percent of Kumho Petrochemical's shares are traded, with most of them held by institutional investors such as funds. Foreign long-term investors are believed to have around 30 percent of the total with domestic institutional investors such as funds holding 10 to 12 percent.