NPS flexes muscle in shareholders’ meetings
After Hanjin Chairman Cho Yang-ho was ousted from the board of the group’s top affiliate Korean Air, watchers come up with analysis on who is the next victim of the National Pension Service (NPS).
The NPS, which is the world’s third-biggest institutional investor with an asset of more than $570 billion, played a key role in the removal of Cho from the boardroom.
The outfit, which holds an 11.56-percent stake in Korean Air, opposed Cho’s re-appointment to the board, claiming that his presence “will undermine corporate value and shareholder rights.”
By contrast, Hyundai Motor could win off in a proxy war against U.S. hedge fund Elliott Management thanks in no small part to the NPS, which sided with the automaker in a recent shareholders’ meeting.
The influence of the NPS comes from its shares. It has invested around $100 billion in the Korean stock market.
Currently, the NPS is the largest shareholder of KT and POSCO with stakes of 12.19 percent and 10.72 percent, respectively. The former is Korea’s leading telecom operator, and the latter is the nation’s top steelmaker.
The NPS has also channeled big funds to largest-cap companies of Asia’s No. 4 economy. Its stakes in Samsung Electronics and SK Hynix are 10 percent and 9.1 percent each. Samsung is the world’s biggest memory chip maker while SK is the runner-up.
The entity also holds stakes of 10 percent and 8.27 percent in LG Chem. And Hyundai Motor, apiece. The two are business bellwethers of the nation’s chemical and automotive industries.
“The overall capitalization of Korean firms are more than $1,500 trillion, and the NPS accounts for 6.5 percent. It retains more than 5 percent shares in a total of 294 companies here,” a Seoul analyst said.
“Against this backdrop, it is safe to say that most major companies are affected by the decision of the NPS. Many believe that there would be more victims like Chairman Cho.”