Open Letter to Shareholders

9 March 2004

Dear fellow shareholders,

It is exactly 12 months since our company began acquiring shares in SK Corporation. Since then much has been said and written about our parent company, Sovereign Asset Management. Much of it has been factually incorrect.

I want to clarify some key issues to help you as shareholders make the right decision at the AGM.

Regardless of the outcome of the AGM we will continue in our attempts to reform this fine company. Reform requires b leadership, patience, focus and hard work. We believe that a reformed SK Corporation will bring substantial long-term benefits to the Korean economy and to all the company's stakeholders.

We will not sell our stake to the company. Press reports yesterday have raised the prospect that we might look to sell our stake back to the company in some form of "Jasaju" or green-mail. Use of company funds to buy our stock in a preferential fashion would be a blatant breach of fiduciary duty and a total contradiction of all our principles. It has never been considered by us and will not happen.

The annual shareholders meeting tomorrow should focus on just a few key facts:

• SK Corp as an investment has failed to deliver the returns it should have delivered to all of us, the shareholders
• Today SK Corp has a board which includes people who have been found criminally guilty of fraud
• Today SK Corp has a board which has systematically and consistently put the interests of the few ahead of all shareholders in general
• There is no reason to believe that current leadership of SK Corp will change any of the above
  What Sovereign has done is raise these issues in order to get you, our fellow shareholders, to decide what you want to do about your investment.

We believe that all of us shareholders are faced with clear choices:

• We can continue to do nothing, put up with poor returns on our investment, and watch a great Korean company deteriorate into a shadow of its former self
• We can simply sell our shares and walk away, or
• We can collectively take action by sending a direct message to the board of this once great company that self-serving financial decisions that penalise minority shareholders will no longer be tolerated.
  We have chosen the latter course and will use our votes to send a clear message that change is urgently required.

We see Friday's AGM as a referendum on both the company's and the country's commitment to reform. This is why we are asking you to vote for our highly respected independent candidates and why we ask you to reject the appointment of the company's nominees. This is why we ask you today to join with us in voting for our proposed amendments to the company's constitution.

Together we have an opportunity to put in place a governance structure that will help unlock the great potential that SK Corp has as one of Asia's leading energy companies.

And tomorrow you have an opportunity to send a message to the world that Korea is a great place to do business.

Your vote is extremely important.

Thank you for your support

James Fitter
Chief Executive Officer
Crest Securities Limited

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