While 'activism' is becoming increasingly active in Korea, it is a reality that minority shareholders find it difficult to voice their opinions. According to Korea Investment & Securities, of the 2,460 corporations that held their regular shareholder meetings this year, only 41 (2.4%) had shareholder proposals submitted. The total number of shareholder proposals was 134, of which only 15 (11.2%) were approved. In contrast, the approval rate for proposals excluding shareholder proposals reached 96.7%.
TPLEX, a stainless steel specialized corporation, is a rare case in this context. They submitted a minority shareholders' proposal to the regular shareholder meeting, leading to the appointment of an internal auditor. CEO Kim Tae-seop noted that "listening to shareholders' voices is a given" and stated that he aims to create a company that acts together with employees and shareholders.
CEO Kim is the son of founder Kim Young-guk and joined TPLEX in 2020. After experiencing roles in production and sales, he became Vice President last year and was promoted to President this year. In his first year as President, he is tasked with both growing TPLEX and meeting the expectations of shareholders.
On the 14th, CEO Kim, who met at TPLEX headquarters in Ansan, Gyeonggi Province, outlined his goal of recovering annual sales to 250 billion won by establishing a second factory. He also mentioned plans for additional share buybacks following the 2 billion won buyback conducted this year to return capital to shareholders. He stated he is also considering the introduction of interim dividends. Below is a Q&A.
─Having been appointed as CEO and President after this year's regular shareholder meeting and board of directors, what is the top priority?
"I feel a heavy sense of responsibility. Although the first quarter (January to March) performance is still being settled, it is estimated that it has performed comparably to the same period last year. The issue lies in the second quarter. I anticipate that uncertainty in the global economy and a domestic economic downturn will continue throughout this year.
TPLEX primarily engages in processing and distributing stainless steel products ranging from stainless rods to bars and plates. These products are widely used in appliances, construction, and facilities in industries such as semiconductors and liquefied natural gas (LNG). Therefore, it is inevitably influenced by the conditions of upstream industries.
I am actively meeting with customer companies regardless of weekdays or weekends, thinking that 'crisis is an opportunity.' I also plan to strengthen the internal foundation of the company that I have not been able to focus on while working towards growth.
─An outline has been presented to reinvent itself as an advanced materials corporation. What are the specific plans?
I plan to build a second factory with an area of 6,600 square meters using some of the vacant land next to the current factory. Considering the need for space for inventory and products waiting for dispatch, the current factory space is insufficient. Based on this, the short-term goal is to recover annual sales to about 250 billion won by 2027.
Additionally, I aim to reinvent TPLEX as a domestic advanced materials corporation by 2031, coinciding with the 50th anniversary of the company's founding. Although I have only walked the path of a stainless steel processing specialized corporation, I also plan to test various products between steel manufacturers and customer companies. If necessary, I will keep the door open for entering related new businesses.
─A shareholder proposal was submitted at this year's regular shareholder meeting.
"TPLEX has accepted all three shareholder proposals, including the appointment of an internal auditor proposed by minority shareholder representatives and cash dividends of 100 won per share, to conduct the shareholder meeting fairly. Among these, the internal auditor appointment proposal was approved.
Of course, there were various opinions regarding the shareholder proposal led by representatives of certain interested corporations. A1 Asset Management, which led the minority shareholder movement, is an asset management company focused on debt collection, holding 1.02% of TPLEX equity. A1 Asset Management and related companies have had both tangible and intangible business relationships with TPLEX and its major shareholders. Nevertheless, they submitted it at the shareholder meeting for the greater good.
─It also came under scrutiny during the voting process.
"I regret strongly that baseless rumors were created in the process of gathering votes from the minority shareholder movement. The claim that the company's wealth was leaked to the major shareholders through internal transactions is unfounded. We are currently taking legal action for defamation.
The claim that Koo Hee-chan, the auditor appointed through the shareholder proposal, is a figure who resigned while standing up against the management's oppression when he was a former vice president is also merely an unfounded assertion. The decision to appoint Mr. Koo as the auditor respects the will of the shareholders, but I hope that any inaccuracies will be corrected.
─The total executive compensation decreased from 3.06 billion won in 2023 to 2.406 billion won last year. Was this also a consideration for minority shareholders?
"This reflects the discussions from the last regular shareholder meeting. Although it is not as much as the shareholders expected, we increased the dividend from 20 won per share last year to 25 won this year. The company has been considering how to enhance its undervalued corporate value, including plans for increasing dividends and returning capital to shareholders. While it is practically difficult to completely change everything at once, we will continue to do our best for the rights of shareholders.
─Are there any plans for shareholders' rights?
"To return capital to shareholders, we are considering expanding dividends, as well as introducing interim dividends. Additionally, we plan to purchase 2 billion won worth of our own shares from January to June this year, with further buybacks in mind. I also intend to actively conduct investor relations (IR) activities.
Improving performance to enhance corporate value is ultimately essential. I have a desire to expand into the materials business. Since I am not the founder, I have thought that I need to listen to the voices of employees and shareholders more. Through this, I aim to achieve the goal of building a company that grows together.