The message of increased shareholder value through reform at SK Corp is finding growing support among private Korean investors ahead of the refiner's Annual General Meeting on March 11.
The investment community - including the highly respected Centre for Good Corporate Governance of Korea - has overwhelmingly chosen to support a vote against the re-election of Chairman Chey Tae-won as a matter of principle.
The CGCG recommends voting against Chairman Chey noting that: "Chey not only violated the law of this land, but also seriously undermined corporate ethics."
Now, with the crucial AGM vote less than one week away, private Korean investors are recognising that without a decisive break from the failed leadership of Chairman Chey, the refiner will continue to badly under-perform its peers.
The dividend for SK Corp investors who bought at the beginning of 2004 is just 40% that of the yield enjoyed by investors in S-Oil. By voting against Chairman Chey, Koreans will be removing a drag on SK Corp's value put at $3.2bn by investment bank Credit Suisse First Boston, in a report from December 2004.
A spokesman for SK Corp's Minority Shareholders' Association, which represents over 470 domestic investors, says: "Chey Tae-won has hidden behind high oil prices and strong margins, but any comparison with S-Oil shows how little this management has done to realise SK's true value. Chey Tae-won should have stepped down of his own volition following his unethical and illegal activities, now it is the duty of Korean shareholders to vote against him - out of principle and to safeguard shareholder returns."
Individual Korean shareholders enjoy a hugely influential position in the few days that remain for votes to be cast. James Fitter, Sovereign's Chief Executive Officer comments: "With the prize of reform this close, it is essential that every shareholder's voice is heard. It is up to Koreans to make a difference and enjoy the rewards."
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