MBK Partners: “KEMCO Board Nominees Expanded to Seven; Shim Hye-seop and Lee Jun-bong Ranked First and Second in Votes” [Financial News Market Watch]

[Financial News] The number of directors recommended by Youngpoong and MBK Partners who have joined KEMCO’s board has increased to seven. However, next year’s annual general meeting is expected to be the real turning point that could alter the balance of power on the board. A total of nine seats will be up for election at once, including seats for directors and audit committee members whose terms are expiring.
According to investment banking industry sources on the 9th, KEMCO held its 53rd extraordinary general meeting of shareholders at Mondrian Seoul Itaewon and voted on the appointment of independent directors. In Agenda Item 2, which was decided through cumulative voting, attorney Shim Hye-seop and Sungkyunkwan University Law School Professor Lee Jun-bong, both recommended by Youngpoong and MBK Partners, ranked first and second, respectively, in votes received. Lee Hyung-kyu, an emeritus professor at Hanyang University Law School, and Seo Eun-suk, a professor in Sangmyung University’s Department of Economics and Finance, who were recommended by KEMCO, were also elected. As a result, two nominees from each side joined the board.
In contrast, Baek In-gyu, a professor at Dankook University recommended by KEMCO’s board, was elected under Agenda Item 3, which concerned the appointment of an independent director who would also serve on the audit committee. The resolution to elect Baek received 5,092,815 votes in favor, securing 81.8% of the voting rights represented at the meeting. Park Yu-kyung, the candidate recommended by Youngpoong and MBK Partners, received 1,739,065 votes, or 27.94%, and failed to meet the majority requirement. The resolution was therefore rejected.
This was the first time the so-called combined 3% rule under the revised Commercial Act was applied to the appointment of an audit committee member. The chair of the meeting explained that, even when the largest shareholder and related parties exercised their voting rights in different directions, their holdings were aggregated, with voting rights recognized only up to 611,796 shares, equivalent to 3% of the total number of issued shares with voting rights. As a result, the voting power of the Youngpoong–MBK Partners alliance, which holds more than 40%, was effectively blocked in the audit committee vote.
Following the vote, Choi Yun-beom’s side had 12 directors on the KEMCO board, while Youngpoong and MBK Partners had seven. Numerically, Choi still holds the advantage, but observers say the channels for recording minority opinions within the board and requesting access to documents and the convening of board meetings have broadened. Shim Hye-seop and Lee Jun-bong have each been vocal in the fields of auditing and corporate governance, prompting speculation that the dynamics of board discussions could shift depending on the issue under consideration.
Youngpoong and MBK Partners said in a statement that they respected the shareholders’ decision. They emphasized the need for independent verification at the board level.
Youngpoong and MBK Partners also called on newly elected audit committee member Baek In-gyu to prove his accounting and auditing expertise and independence through his actions. They said the appointment was not an absolution for allegations involving Choi Yun-beom, but the beginning of his responsibility as an auditor. They also proposed that the current board adopt a process for recommending audit committee candidates that is open to all shareholders holding at least one share and subject to an external independent review.


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