Minority shareholders starting to flex muscles
Fair Trade Commission Chairman Kim Sang-jo, left, and Kumho Asiana Group Chairman Park Sam-koo
Retail investors sue Kumho Asiana chairman, FTC chief
By Park Jae-hyuk
Minority shareholders, once considered to have little power to influence corporate management issues, are joining hands to exercise their rights, according to company officials Friday.
A small group of Samsung SDS shareholders decided to refer Fair Trade Commission (FTC) Chairman Kim Sang-jo to prosecutors for alleged abuse of his authority and attempted coercion.
Their decision came after Asiana Airlines minority shareholders' recent damage suit against Kumho Asiana Group Chairman Park Sam-koo and other executives.
About 60 shareholders of Samsung's subsidiary in charge of system integration said they would file a complaint against the head of the nation's anti-trust watchdog at Seoul Central District Prosecutors' Office on Aug. 20.
“At a press conference commemorating the first anniversary of his inauguration June 14, Kim urged owner families of large business groups to sell their stakes in non-core affiliates that rely on inter-subsidiary trading, citing system integration, logistics, real estate management and advertising firms as such. He said firms refusing to do so will be subject to regulation,” they said in a statement. “A day after he made the remarks, Samsung SDS shares nosedived by 14 percent and the stock price has never rallied since then.”
Kim defended himself, saying on June 19 that stockholders of the listed company responded sensitively, although he only mentioned non-core and unlisted companies.
His explanation, however, failed to satisfy the shareholders, so they decided to take legal action.
“Because Kim's remarks resulted in real damage, he can be accused of abuse of his power,” said their attorney, who belongs to the Lawyers for Human Rights and Unification of Korea. “Had he not made the remarks, Samsung SDS shares might have risen, so his explanation is meaningless from a legal point of view.”
The FTC declined to comment.
On Thursday, eight minority shareholders of Asiana Airlines, who hired Hannuri Law for legal representation, filed a lawsuit against the chairman and executives of Kumho Asiana Group, demanding 70.3 billion won ($62.4 million) compensation.
The eight hold 463,850 shares in the company ― about 0.23 percent.
They claimed misconduct by Chairman Park and executives damaged the air carrier.
“The executives licensed Gate Gourmet Korea as an in-flight meal provider for Asiana for the next 30 years, for the sake of Kumho Holdings under Park's control, rather than to benefit Asiana,” the shareholders said in the petition submitted to Seoul Southern District Court.
Last year, Asiana ended its contract with LSG Sky Chefs, which had to provide in-flight meals to the airline for the past 15 years, and signed a 30-year catering service deal with Gate Gourmet Korea, a joint venture with China's HNA Group.
Gate Gourmet Korea's catering services were supposed to begin July 1, but a fire at the construction site of its new production facility in March prevented the supply of meals. To cope with this, the carrier signed a three-month supply contract with a smaller firm, Sharp DO & CO, but it failed to supply enough meals.
Asiana said it would take a wait-and-see attitude toward the lawsuit.