KT&G Prepares to Decide New CEO Amid Controversy
According to South Korean media reports on February 21, the South Korean tobacco company KT&G is about to decide on a new CEO. Investment fund company Flashlight Capital Partners (FCP) has sent a letter to the National Pension Fund of Korea requesting their active involvement in the CEO selection process of KT&G. The letter also includes opposition to internal candidates.
FCP sent a shareholder letter to the National Pension Fund of South Korea the previous day, urging them to exercise their voting rights in the election process of KT&G's president.
According to data from September 2023, the National Pension Fund of Korea is the second largest individual shareholder of KT&G, holding 6.31% of the company's shares, behind only the Industrial Bank of Korea (IBK) with 6.93%.
The final four candidates include two internal candidates from KT&G, including KT&G Senior Vice President Fang Jingman and KGC Ginseng Corp President Heo Taek-gu, as well as two external candidates, former Samsung Electronics Vice President Kwon Jik-hyun and former AK Holdings Group President Lee Sik-joo. FCP has opposed two of the leading candidates from KT&G in the letter.
An FCP stakeholder explained, "KT&G is currently involved in some negative news. We believe that its board lacks professionalism and independence. Therefore, we oppose the two candidates from within KT&G due to performance issues.
KT&G responded by stating that they are currently in the process of conducting a fair selection process, which consists of three stages: first, the governance committee and the president's recommendation committee, composed of independent directors with expertise and independence, evaluate the candidates; next, an open and public selection process is carried out, with input from an external panel of experts; and finally, the final approval is given by the shareholders' meeting.
If everything goes smoothly, KT&G will announce a final candidate by February 23. Once the final candidate is confirmed, the issue of electing directors will be brought up at the regular general meeting of shareholders in March, and his appointment will be decided.
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