Kumho Petrochemical chairman gains complete victory over nephew in management dispute

By Kim Hyun-bin

The Kumho Petrochemical family rivalry seems to have died down with shareholders taking the side of the sitting Chairman Park Chan-koo, in a leadership dispute led by his nephew Park Chul-wan. All of the proposals by the nephew were struck down during a shareholders meeting at company headquarters in Seoul, Friday.

Shareholders also voted down Chul-wan's reappointment to the board of directors.

The management named Baek Jong-hoon, the head of operations, as their candidate, while Chul-wan named himself for the executive director post.

Industry insiders says it is a “complete victory” for Chairman Park to carry on in his position with his company agenda.

The key contingency was in the dividend payouts where the management and Chairman Park came out on top. The chairman proposed to allocate 4,200 won per common share, while his nephew proposed to raise each share dividend to 11,000 won. The management gained 64.4 percent approval from shareholders, while Chul-wan's proposal was rejected with only 35.6 percent in favor.

Just before the vote, Chul-wan claimed the company obtained cash assets worth 800 billion won that would be better to utilize as dividends than to retain the cash. “Our dividend is much lower compared to competitors within the industry and it needs to be realized,” he said.

The nephew also proposed to separate the chief executive officer position and board of directors chairman position, which was also fully rejected.

Chul-wan is the son of late Kumho Group Chairman Park Jeong-koo, who was older brother of current Chairman Park Chan-koo.

The so-called “nephew's revolt” ended in a complete victory for Chairman Park with all the nephew's proposals being rejected in the shareholders meeting.

Many predicted the outcome after the National Pension Service (NPS), the world's third-largest pension fund and the second-largest shareholder of Kumho Petrochemical, announced its backing for the sitting chairman earlier this week.