NCsoft sends response to requests from Nexon

NCsoft, Korea’s No. 2 game company, said it answered Nexon’s request on Tuesday whether or not the nation’s largest gaming company can exercise its rights as NCsoft’s largest shareholder.

Nexon and NCsoft both said they would not disclose what was said in the reply.

NCsoft has refused to join Nexon’s council of board of directors, but the large company continued making requests of NCsoft, including that the company appoint a director from Nexon.

On Friday, Nexon’s made public its attempt to exercise its rights as NCsoft’s main shareholder. The No. 1 gaming company asked NCsoft to accept an executive from Nexon and announce it during a shareholders meeting next month. It also asked for the company to halt investment in real estates, increase dividend payouts and dispose 8.9 percent of its treasury stocks.

Nexon also asked to disclose the annual salary of nonregistered executives with earnings of more than 500 million won ($460,000) and the reasons for the payment.

NCsoft went ahead with its board of directors meeting early Tuesday morning without Nexon representatives present and without discussing Nexon’s proposals.

At the meeting, NCsoft reportedly discussed the agenda for its general shareholders meeting next month, re-electing NCsoft CEO Kim Taek-jin as a director.

“We will not disclose the contents of our reply to Nexon,” said a spokesman for NCsoft. “But the requests by Nexon were not discussed at the board meeting.”

At the meeting, the company also approved last year’s financial statement, which will be announced in a conference call on Wednesday. The spokesman added that Nexon’s requests will not be addressed in the call.

Currently, NCsoft’s board of directors is composed of four registered directors, including CEO Kim Taek-jin, Vice President Lee Hee-sang, Vice President Bae Jae-hyun and Managing Director Jung Jin-soo and three outside directors, Park Byung-moo, Oh Myoung and Seo Yoon-seok.

Later on Tuesday, NCsoft said it had replied to Nexon’s demands.

“We sent a reply to Nexon so that the company will receive it by the end of the day,” the spokesman said. “We won’t disclose how we sent the document or the contents of the response.”

Nexon also said it will not disclose the contents.

“As NCsoft says it does not intend to disclose the reply, we are not going to make it public, either,” said Nexon spokesman Cha Eu-sun. “After a thorough review, we will announce our position.”

The feud between Korea’s leading game companies started in Jan. 23 when it was revealed that NCsoft CEO Kim’s wife Yoon Song-yee would be promoted to president.

Nexon has been making demands to exercise its rights as NCsoft’s largest stakeholder, citing NCsoft’s falling stock value and failure to adapt to the rapidly changing market.

Industry observers predict that it is likely that NCsoft will accept some of Nexon’s requests.

But some say it is possible that NCsoft will flatly reject the requests by Nexon, as it has strongly resisted the larger company’s attempts to interfere with its management style.

If Nexon does not accept NCsoft’s reply, the conflict between the two could worsen before the shareholders meeting in March.

BY KIM JUNG-YOON [kjy@joongang.co.kr]