Peace comes where war was expected

‘Shareholders Day’ ends without any particular minority mutinies

By Kim Yoo-chul

It was peace that emerged from what was expected to be a tempest.

Many firms held shareholders’ meetings Friday with controversies presaging nasty duels with minority shareholders.

SK Group and Hanwha looked particularly vulnerable but virtually nothing happened.

“This year wasn’t different. No big disputes and clashes were seen between top management and minor shareholders,” said an official from the Korea Chamber of Commerce and Industry (KCCI), Korea’s top business lobby group, Friday.

March 23 was previously dubbed “Shareholders Day” with 672 listed companies holding their annual meetings.

SK Group Chairman Chey Tae-won is being tried over embezzlement charges but the conglomerate is confident of his innocence, saying that the trial will clear him of any suspicions.

Hanwha Group Chairman Kim Seung-youn was also charged with allegedly misusing corporate funds worth of 899 million won. For its failure to report this, the conglomerate was slapped with a one-day trading suspension.

For SK, all five issues were passed within 30 minutes. SK told its shareholders that the conglomerate was going to spend more for overseas businesses.

Shareholders of Hanwha Group also passed five key issues and there weren’t major clashes or even strong opposition to block Kim from continuing with his current job.

Hanwha Chemical, one of the group’s key affiliates, decided the current six top executives including Kim will retain their current posts. The National Pension Service (NPS), which holds 2.4 percent of Hanwha Chemical, also supported Kim.

The trading of Hanwha shares was halted for one day as a penalty for being late on public disclosure of a breach of trust charges against Kim as well as some of its officials.

Despite such morality related issues, the Korea Exchange (KRX), Korea’s top bourse operator, scrapped its plan to delist Hanwha as the company management vowed to improve transparency in management.

Himart, a top Korean home appliance retailer, had expected some troubles in its annual meeting as its Chairman Sun Jong-koo was summoned by prosecutors for questioning on charges of capital flight and tax evasion.

Sun failed to appear, however, major issues for Himart were passed despite oppositions from minor Himart shareholders.

“We will sell Himart as planned,” said a Himart spokesman.

Korea’s top prosecutors are planning to question Sun over an alleged offshore tax evasion scheme that included setting up several “paper companies” in European tax havens in an attempt to hide his wealth and the firm’s funds over 100 billion won, according to prosecutors.

Shareholders of Hynix Semiconductor, the world’s No. 2 maker of computer memory chips, approved the plan to rename the chipmaker.

“Hynix Semiconductor is now SK Hynix. Our shareholders approved it,” SK Hynix co-CEO Kwon Oh-chul said during the company’s annual meeting with shareholders in the provincial city of Icheon, south of Seoul, where SK Hynix’s key DRAM lines are located.

The company will hold an official launch event Monday in Icheon with Kwon and the other co-CEO Chey Tae-won, who is also the SK Chairman, set to appear.

Half an hour was enough for SK Telecom to pass all issues at its shareholders’ meeting. Korea’s top mobile carrier named SK Group President Kim Young-tae and Ji Dong-sup, a senior SK Telecom executive, as new board directors.

Although it was expected that there would be some opposition from minor shareholders because of Korea’s top anti-trust agency’s decision to fine SK Telecom $17.9 million for price rigging and consumer fraud, shareholders approved the current Chief Executive Ha Sung-min to continue in the top job.

Meanwhile, the Fair Trade Commission (FTC) levied a total of $40.2 million in fines on Samsung, LG Electronics and Pantech, as well as KT, LG Uplus and SK Telecom.

The government agency has found that a total of 209 phone models had been marked up by the three handset makers before they were sold on to network operators.

The top three mobile carriers then “falsely advertised” the products as discounted or with special incentives to consumers. This tricked them into thinking they were getting a bargain, even though the products “should not have been so expensive in the first place.”

Ha said the acquisition of Hynix will significantly help the carrier see further external growth and added the firm will put more focus on strengthening its capability to better provide advanced handsets equipped with the 4G Long-Term Evolution (LTE) wireless technology.