Updated March. 29, 2014 02:37
The third "super shareholders` meetings day" ended Friday with no extraordinary changes in corporate management. The current management of Shinil Industrial Co. defended their managerial control at the company`s general shareholders meeting against a challenge from a group of individual investors.
On Friday, 479 publicly traded companies held their annual shareholders meeting Friday. Previously, 116 other companies held their shareholders` meetings on March 14 and another 662 on March 21. At Friday`s meetings, some shareholders voted against proposals made by companies but most of them failed to make changes.
At Shinil`s meeting, three individual investors, led by Hwang Gwi-nam, proposed to change the company`s articles of incorporation and appoint new members to its board of directors, challenging the current management. However, all their proposals were voted down.
Prior to the shareholders` meeting, Hwang proposed to increase the number of Shinil`s board members to nine from the current five and abolish the company`s "golden parachute system," under which it pays 2 billion won (1.9 million U.S. dollars) in compensation for board directors dismissed before the end of their terms in order to protect the current management`s control. In addition, Hwang recommended three people, including himself, as board members and two others as outside directors.
On Feb. 17, Hwang announced that he had acquired a 11.27 percent stake in Shinil and would participate in the company`s management. Kim Young, Shinil`s chairman and the largest shareholder, had only 9.9 percent of friendly shares in his support. However, Shinil recognized only a 5 percent stake of Hwang`s, claiming that he had failed to publicly disclose his shareholdings in the company, raising issues with the authenticity of letters of trust that Hwang claimed to have won from some other shareholders.
"I refuse to accept the results of the shareholders meeting," Hwang said, adding he would file a lawsuit to invalidate or cancel the results, seek an injunction for the suspension of board directors` duties, and call an extraordinary shareholders meeting.
By contrast, Hyundai Elevator Co. failed to add new lines to its business purposes due to opposition from its second-largest shareholder, Schindler Holding AG of Germany.
Hyundai Elevator proposed to change its articles of incorporation to add new business purposes such as road pavement, eco-friendly and energy-related businesses and industrial robot manufacturing. However, the German shareholder voted down the proposals, saying Hyundai should focus on its core business at a time when it suffered huge losses from derivatives contracts designed to protect Hyundai Group Chairwoman Hyun Jeong-eun.
Changing a company`s articles of incorporation requires consent from at least two-thirds of shares with voting rights and present at a shareholders meeting. Schindler owned a 30.93 percent stake in Hyundai at the end of last year. However, the percentage of its voting right rose to 40.89 percent due to the absence of some shareholders.
However, Hyundai`s other proposals on appointing a new board member and maintaining the ceiling on compensations for board directors have been all passed despite the German shareholder`s objection. Those proposals require consent from at least 50 percent of votes present at the meeting.