Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Minority shareholders continue protest against Sajo's owner family
Sajo Group Vice Chairman Ju Ji-hong
By Park Jae-hyuk
By Park Jae-hyuk
Sajo Group's owner family is facing another battle with minority shareholders of Sajo Industries, who are threatening to file a lawsuit against the company, if it refuses to accept their request to increase dividends at the general shareholders meeting next month.
Earlier this year, a group of the minority shareholders sent a letter to the deep-sea fishery company asking it to raise dividends to 1,500 won ($1.30) per share from the five-year average of 200 won.
“The company has long been stingy about shareholder returns, so the market has avoided buying its shares and suspected the company of intentionally lowering its stock price for managerial succession,” the group's leader said in the letter. “The board of directors is obliged to make efforts to enhance the listed company's enterprise value for all shareholders.”
Sajo Industries has been in conflict with its minority shareholders for more than a year, due to controversies over Sajo Group Chairman Ju Jin-woo's oldest son Ju Ji-hong, who was promoted to vice chairman in January.
Last March, Sajo Industries withdrew its plan to merge with Castlex golf clubs in Seoul and Jeju, after its minority shareholders hired a law firm to protest the planned merger, which was widely seen as an attempt to benefit the chairman's son by shifting the golf clubs' losses onto the fishery company.
The heir apparent has a 49.5 percent stake in Castlex Jeju, which has been suffering accumulating losses. As the largest shareholder of Sajo Systems having the biggest stake in Sajo Industries, he has tightened his control over the entire group with only a small amount of shares.
The group of Sajo Industries' minority shareholders also demanded the dismissal of the Sajo Group chairman from the board of directors and the appointment of the group's leader as one of the directors, during an extraordinary general shareholders meeting last September.
The group's owner family having a 56.56 percent stake in the company defended their control at that time from the minority shareholders, who collectively owned a 21.2 percent stake.
More recently, the minority shareholders expected the National Pension Service (NPS) to file a lawsuit against Sajo Industries as one of its shareholders, but the pension fund sold most of its stake in the company after suffering an estimated 20 billion won loss.
Although chances have become slim for the minority shareholders to defeat the owner family at the forthcoming shareholders meeting, the lingering conflict could damage the company's environmental, social and corporate governance (ESG) management in the long run.
In response, Sajo Industries has acknowledged the importance of shareholder engagement, but denied the claim that it has lowered its stock price intentionally.
“In order to raise our stock price, investments from institutional and overseas buyers need to continue,” the company said in a statement. “After our company's minority shareholders started their campaign, such investments have decreased significantly. This has proven that the minority shareholders don't see eye to eye with the institutional and overseas investors.”