Hyundai Motor confident chairman to retain board seat
South Korea's Hyundai Motor Co said on Wednesday that it expects Chairman Chung Mong-koo to be re-elected to its board despite the National Pension Service's decision to vote against him.
By Agencies |
SEOUL: South Korea's Hyundai Motor Co said on Wednesday that it expects Chairman Chung Mong-koo to be re-elected to its board despite the National Pension Service's decision to vote against him.
``We think shareholders will support Chairman Chung's re-election to the board given the fivefold rise in the stock price and doubling of revenue since 1999,'' said Jake Jang, a company spokesman.
Chung has been chairman of Hyundai Automotive Group, the world's sixth-largest carmaker, since 1999.
Earlier, the National Pension Service said it has decided to vote against Chung at a shareholder meeting Friday.
``His conviction last year on embezzlement and fraud damaged shareholders' value,'' NPS official Kim Moon-soo told Dow Jones Newswires. ``That's why we have decided not to support another three-year term on the board.''
With a stake of 4.56 percent, NPS is the sixth-largest shareholder in Hyundai Motor.
Analysts said that a majority of shareholders will likely vote for Chung's re-election since convictions of other companies' senior executives have rarely resulted in removal from the board.
``NPS' decision is not necessarily designed to oust Chung from the board, but is a signal to Hyundai to prioritize shareholder value and transparent governance,'' said Lim Chai-gu, an analyst at Kyobo Securities.
In September last year, a Seoul appeals court spared Chung from going to jail after a lower court in February had sentenced him to three years in prison after finding him guilty of creating a 103.4 billion won (US$106.5 million; euro69.3 million) slush fund.
``We think shareholders will support Chairman Chung's re-election to the board given the fivefold rise in the stock price and doubling of revenue since 1999,'' said Jake Jang, a company spokesman.
Chung has been chairman of Hyundai Automotive Group, the world's sixth-largest carmaker, since 1999.
Earlier, the National Pension Service said it has decided to vote against Chung at a shareholder meeting Friday.
``His conviction last year on embezzlement and fraud damaged shareholders' value,'' NPS official Kim Moon-soo told Dow Jones Newswires. ``That's why we have decided not to support another three-year term on the board.''
With a stake of 4.56 percent, NPS is the sixth-largest shareholder in Hyundai Motor.
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Analysts said that a majority of shareholders will likely vote for Chung's re-election since convictions of other companies' senior executives have rarely resulted in removal from the board.
``NPS' decision is not necessarily designed to oust Chung from the board, but is a signal to Hyundai to prioritize shareholder value and transparent governance,'' said Lim Chai-gu, an analyst at Kyobo Securities.
In September last year, a Seoul appeals court spared Chung from going to jail after a lower court in February had sentenced him to three years in prison after finding him guilty of creating a 103.4 billion won (US$106.5 million; euro69.3 million) slush fund.
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