A proposal to introduce cumulative voting by the activist fund Align Partners was defeated at Coway's regular shareholders meeting.
According to Align Partners on the 31st, the cumulative voting proposal at Coway's shareholders meeting held that day did not pass, with a support rate of 46.5%.
Cumulative voting grants one vote per share for each director to be elected. If five directors are to be elected, one share will carry five votes. Cumulative voting is considered a means to protect minority shareholders as it allows shareholders to concentrate their votes on a single candidate.
Lee Chang-hwan, representative of Align Partners, noted, "Although the introduction of cumulative voting was defeated, the fact that we confirmed the support of shareholders expecting improvements in Coway's governance structure is significant."
Align Partners also positively evaluated Coway's shareholder return policy. Coway decided to buy back approximately 650,000 shares as part of its mid- to long-term shareholder return expansion policy at this shareholders meeting. In the future, it plans to increase the total shareholder return ratio from 20% to 40% and pursue various measures to enhance shareholder value.
However, Align Partners maintained its existing position that governance restructuring must accompany these changes. The representative stated, "Since Netmarble became Coway's largest shareholder, there has been a sharp decline in shareholder returns and various conflicts of interest between the largest shareholder and minority shareholders, but Coway's board has not played any oversight role at all," adding, "It is urgent to secure the independence of Coway's board from Netmarble."
The representative further stated, "Based on the results of this shareholders meeting, I will continue to strive to enhance Coway's shareholder value."