JB Financial set for battle against activist fund

JB Financial Group's headquarters in Jeonju, North Jeolla Province / Korea Times file

By Lee Yeon-woo

JB Financial and activist fund Align Partners are set to face off at the upcoming general stockholders' meeting, as JB Financial rejected proposals from its second-largest shareholder to increase dividends and appoint an outside director.

According to JB Financial, the firm will hold a general stockholders' meeting in Jeonju City, North Jeolla Province on March 30 to discuss the agenda regarding profit sharing for 2022. The proposals made by Align Partners will also be voted on during the meeting.

Last month, Align Partners proposed that JB Financial increase its dividend from 715 won ($0.54) to 900 won and nominate Kim Ki-seok, the founder of CROWDY, as an outside director.

On Thursday, however, JB Financial announced that it was opposed to Align Partner's proposals to increase dividends and appoint an outside director.

“We believe that increasing dividends can actually harm the firm's financial value and the interests of its shareholders,” the financial firm said.

The company also rejected the proposal to appoint Kim as an outside director, stating that it was unable to assess whether the recommended person possesses the necessary expertise and independence due to insufficient verification and selection procedures.

Align Partners expressed regret over JB Financial's decision.

“Major international banks return an average of 64 percent of the profits to shareholders, while KB and Shinhan Financial return 33 percent. We suggested 33 percent to JB Financial, and we believe it is a reasonable amount that would not affect its capital ratio or financial capacity,” the activist fund argued.

“We recommended Kim Ki-seok as an outside director because of his long-term career in international financial institutions, which demonstrates his expertise in the capital market,” the fund stated.

Other major shareholders will determine whether the proposals will be accepted. Samyang Corporation, the largest shareholder of JB Financial with a 14.61 percent stake, and Align Partners, with a 14.04 percent, hold a similar amount of shares.

Other major shareholders ― OK Savings Bank, with a 10.21 percent stake, the National Pension Service with a 7.79 percent stake and Capital Group with 5.11 percent ― will play a key role in the decision. However, OK Savings Bank has not yet revealed its stance on the matter.