Major Listed Firms Nudged Closer to Accountability

Korea Times (Seoul, Korea), February 16, 2001 | Go to article overview

Major Listed Firms Nudged Closer to Accountability


Listed firms will hold consecutive shareholders meetings until the end of next month, with Nexen Tire Corp. kicking off the series yesterday.

At this year's shareholders meetings, listed companies with more than 2 trillion won ($1.59 billion) in assets will be required to fill half of the seats on their boards with outside directors.

In order to resolve the problem, they may resort to soliciting those with some kind of connection to the firms or their owners, and if that will be the case, they may run into trouble from minor shareholders.

These minor shareholders are already likely to raise the issues of small dividends and the fall in share prices on the stock exchange. Whereas most listed companies would like to increase retained earnings to prepare for a business slowdown this year, more than ever, they have to consider hostile reactions from small shareholders.

The Korea Listed Firms Association said of the 70 listed firms with shareholders meetings scheduled this spring, 21 will hold them on March 16 and 12 will be held on both Feb. 28 and March 9. Another 7 firms will hold theirs on March 23.

The companies said it is customary to hold shareholder meetings on the second and third week of March. But critics charge the meetings are suspiciously bunched together, as if to force minor shareholders into choosing only one to attend.

The critics are pushing authorities to make firms, especially the affiliates of major conglomerates, hold shareholder meetings on different dates. ``They should stop any moves on the part of these chaebol affiliates to look down on small shareholders,'' the critics claimed.

Until the revised stock exchange law required large listed firms to put outsiders in half of their boards' seats, they had to have only three outside directors.

According to the Korea Stock Exchange, listed companies with more than 2 trillion won in assets number 77, and the number of their outside directors comes to around 48.8 percent. The figure is high due to financial institutions' steadfast efforts to meet laws and regulations, but many chaebols still have a long way to go before satisfying the requirement. …

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