By Jung Sung-ki
A feud over the rights to manage Himart, Korea’s largest electronics retailer, intensified Friday, as employees, supportive of incumbent CEO Seon Jong-koo vowed to stage a rally against Yoo Kyung-seon, CEO of Eugene Corp., a construction company holding the largest stake in the retail chain.
About 450 employees, including 304 branch store heads, held a rally near Himart’s headquarters in Daechi-dong, Seoul, calling on Yoo to quit in his bid to take over the retailer. The branch chiefs said they would resign if Seon is dismissed by the board of directors later this month.
Himart is to hold an extraordinary shareholders’ meeting and one for the board of directors on Nov. 30 over management rights.
The test of authority between the biggest and second largest shareholders began last month when Yoo was elected as a CEO of the company.
Eugene bought Himart in December 2007 and has about a 31 percent stake, while Seon has some 28 percent and the remainder is owned by financial and ordinary investors.
Despite the takeover, Eugene gave Seon the mandate to manage the electronics retailer until last October.
Kwon Hyung-jin, a spokesman for Eugene Corp., said his firm has a divine right to manage Himart as the biggest shareholder.
“We gave the incumbent CEO a four-year mandate to lead the electronics retailer and it was successful,” Kwon said in a phone interview with The Korea Times. “But now we need more professional leadership in order to expand our business here and abroad beyond the electronics retail sector, and that’s why we elected chairman Yoo as a co-leader of Himart.”
He stressed Eugene had never tried to oust Seon, but the incumbent CEO distorted the truth and instigated workers to go on strike with the aim of maintaining his authority.
“Effort to reject a co-CEO system and oust Yoo is a clear abuse of power,” said Kwon.
Eugene plans to exercise its call option to buy a 6.9 percent stake from financial investors to cement its management authority over Himart.
Seon’s supporters are up in arms about Eugene’s move.
In an email sent to employees Nov. 22, Seon wrote, “Eugene Corp. is pushing forward to hold a shareholders’ meeting and a board of directors’ meeting in bids to intervene in the firm’s management. We can’t trust Eugene anymore.”
Seon claims Eugene promised a 7-year leadership under the 2007 acquisition contract, while Eugene says there is no such term.
An emergence committee advocating Seon said the incumbent leadership should remain to maintain the No. 1 position in the electronics retail market.
“Under Seon’s leadership and Himart employees’ efforts for years, Himart has become the largest electronics retailer in the country,” the committee said in a statement. “We urge Eugene group to stop efforts to take over the management authority.”
Earlier, the committee planned to close all branch stores in protest of Eugene’s possible management takeover but withdrew the plan not to cause inconvenience to customers.