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Lee Sang-hoon, a lawyer and member of a civilian committee of experts responsible for leading the exercise of voting rights among National Pension Service (NPS) shareholders, during his interview with the Hankyoreh in Seoul on Feb. 6. (Baek So-ah, staff photographer)
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Lawyer Lee Sang-hoon leading battle against chaebol chairman’s reappointment as board director
To prevent the reappointment of Hanjin Group Chairman Cho Yang-ho as a board director at Korean Air, there will be a battle of votes via the delegation of shareholder votes in a “proxy fight” (a confrontation between letters of proxy) at the upcoming general shareholders’ meeting in late March. Cho has been indicted for breach of trust and embezzlement, among other accusations, and is currently facing trial. Lee Sang-hoon, a lawyer and member of a civilian committee of experts responsible for leading the exercise of voting rights of National Pension Service (NPS), met with the Hankyoreh on Feb. 6 and publicly announced the proxy fight, saying, “If Korean Air attempts to reappoint Chairman Cho Yang-ho to the board, we will collect the individual shareholders’ votes and attend the March general shareholders’ meeting to vote against the motion.” A proxy fight is one way of exercising shareholder rights to participate in management, by collecting the proxy votes of shareholders to use in a general shareholders’ meeting. The civilian committee of experts responsible for exercising proxies at the NPS decided last month to oppose the reappointment of Cho to the Korean Air board. However, the opposition of the NPS votes is not sufficient for a quorum. According to company statues, the appointment of a Korean Air board member must receive more than two thirds of vote in a general shareholders’ meeting. Assuming that the attendance rate at the general shareholders’ meeting is 70%, the committee’s strategy is to secure an additional 11.6% of the company stock, in addition to the 11.7 percent owned by the NPS, in order to prevent the reappointment of Cho. This is the first time that there has been a proxy fight over the board appointment of a chaebol chairman accused of illegal behavior, corruption and abuse of power. Moreover, the fact a current member of the NPS committee for the exercising of proxy votes will be leading the proxy fight is a move that is anticipated to stir controversy. Lee, who joined the NPS committee through a recommendation from the Korean Confederation of Trade Unions, has been active in the People’s Solidarity for Participatory Democracy and the Solidarity for Economic Reform, which has been active in calling for chaebol reformation. Currently he serves as the head of the Seoul Welfare Center, a city-funded organization that provides legal consultations and services regarding social services. By Kwack Jung-soo, senior staff writer Please direct comments or questions to [english@hani.co.kr]
