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Photo = Yonhap news |
[Alpha Biz= Paul Lee] The National Pension Service (NPS) has raised objections to the appointment of internal directors at both LG Chem and Celltrion, citing their past actions that allegedly harmed shareholder value. This time, the pension fund opposed the election of Shin Hak-cheol, Vice Chairman of LG Chem, and Seo Jung-jin, Chairman of Celltrion, to their respective boards.
Earlier, NPS also opposed the appointments of Choi Hyun-joon, Vice Chairman of Hyosung Group, as an internal director at Hyosung Heavy Industries, and Jeon Young-hyun, Vice Chairman of Samsung Electronics, at the Samsung Electronics board. However, both of those appointments were approved at the respective shareholder meetings despite the opposition.
According to the NPS' shareholder rights exercise report, the pension fund decided to oppose the appointment of Shin Hak-cheol as an internal director and the approval of the director compensation limit at LG Chem's regular shareholder meeting. The reason for the opposition was Shin's history of "damaging corporate and shareholder value."
NPS has consistently opposed Shin’s entry into LG Chem’s board since 2022, when LG Chem carried out a physical spin-off of its battery division. The pension fund had also opposed LG Chem's division plan during an extraordinary general meeting in 2020, expressing concerns that it could dilute share value and negatively impact shareholder value.
Additionally, NPS opposed the approval of the director compensation limit at LG Chem, arguing that the limit was set too high in relation to the compensation amount and did not align with the company’s business performance.
NPS also decided to oppose the re-election of Seo Jung-jin, Chairman of Celltrion, as an internal director at the company’s general meeting. The opposition stems from Seo's involvement in past controversies that allegedly hurt corporate value and shareholder rights. Specifically, the opposition highlights the financial accounting issues at Celltrion during Seo’s time as an internal director.
In 2018, Celltrion, Celltrion Healthcare, and Celltrion Pharm were under investigation by financial authorities for accounting manipulation, and in 2022, the Securities and Futures Commission under the Financial Services Commission imposed a fine of approximately 13 billion KRW for violations of accounting standards. NPS opposed Seo’s appointment as an internal director in 2023 for the same reason.
As of the end of last year, the NPS held 8.20% of LG Chem’s shares and 6.79% of Celltrion’s shares, making it a major shareholder in both companies. With the NPS’s opposition, the upcoming shareholder meetings of both companies are likely to face increased challenges.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
