With NPS backing, POSCO chief expected to win second term

By Nam Hyun-woo

The National Pension Service (NPS), which owns the largest stake in POSCO, will take a neutral stance in a vote determining POSCO Chairman Choi Jeong-woo's second term, due to concerns that he failed to prevent a number of industrial accidents from happening at the steelmaker.

The decision was reached at an NPS trustee responsibility committee meeting on Tuesday night. The vote will take place at POSCO's annual general shareholders' meeting on Friday.

“There were mixed opinions among committee members on Choi's second term, as some claimed there is no clear ground for objection, while others expressed views that he was negligent in upholding POSCO's corporate value after frequent industrial accidents happened under his watch at the steelmaker,” an informed source said.

“The case does not constitute grounds for objection in NPS' investment guidelines, but NPS decided to take a neutral stance considering the recent enactment of new laws enhancing chief executives' responsibility in industrial accidents,” the source added.

The NPS holds an 11.17 percent stake in the country's top steel manufacturer. Taking a neutral stance means that the NPS will attend the shareholders' meeting and exercise its rights depending on the rate of approval and objection by other shareholders. As the NPS decided to take a neutral stance, the chance of Choi winning his second term is growing.

POSCO's second-largest shareholder is Citibank with a 7.41 percent stake, followed by the steelmaker's employee shareholder association which owns 1.68 percent. Minor and individual shareholders hold a combined 74.3 percent stake in the company.

Choi's second term requires the approval of a majority of attending shareholders. POSCO board members approved Choi's second term. But some sources said Choi's bid still faces uncertainties as a series of fatal accidents have occurred at POSCO facilities and politicians began calling on the NPS to exercise its shareholder rights.

On Feb. 15, ruling Democratic Party of Korea Chairman Rep. Lee Nak-yon asked the NPS to exercise its stewardship code on POSCO to “guide the company to fulfill its social responsibility.”