NPS will oppose Mando executiveThe National Pension Service (NPS), the country’s largest investor, is expected to exercise its voting rights today and oppose the reappointment of Shin Sa-hyeon, chief executive of Mando Corporation, at the company’s shareholders’ meeting.
The NPS said yesterday that the auto component manufacturer under Halla Group invested a large amount to issue new stocks last year to help salvage Halla Engineering and Construction, its affiliate.
“We decided to exercise our voting rights and oppose the agenda of reappointing Mando’s chief executive,” the NPS said in a statement yesterday. “The decision was made as we thought there were records of damaging shareholders’ interests or damaging company value.”
The announcement was made after the NPS held a committee meeting of eight outside officials, including Kwon Jong-ho, a law professor at Konkuk University, and Sung Tae-yoon, an economics professor at Yonsei University. Kwon is the head of the committee that deals with voting issues at the NPS.
According to the NPS, it is the first time the committee has accepted the violation of shareholders’ interests and corporate value damage based on its own facts without a court ruling on embezzlement or misappropriation. Six of eight committee officials agreed to oppose the reappointment of the chief executive.
The NPS, which is the second-largest shareholder of Mando at 13.41 percent, said that in April the company, through its affiliate Meister, invested 378.6 billion won ($355.5 million) to raise capital by issuing new stocks. Of that amount, 338.5 billion won was used to issue new stocks of Halla E&C and raise capital, the NPS said.
“Although Mando, when issuing new stocks of Meister, stated that the purpose was to enhance its distribution infrastructure and promote new businesses, most of the capital raised was used in raising capital to issue new stocks of Halla Engineering and Construction,” the NPS said. “Also, Meister’s total asset volume back then was 373.6 billion won, and the 338.5 billion won worth of capital used in issuing stocks of Halla Engineering and Construction was too much for its size.”
Mando Corporation, meanwhile, released a statement explaining that shares of stockholders increased before and after the new stock issuance of Halla Engineering and Construction, a move to respond to allegations the company violated shareholders’ interests and hurt corporate value.
BY LEE EUN-JOO [firstname.lastname@example.org]