Life Asset Management has taken aim at BNK Financial Group, which is under inspection by the Financial Supervisory Service, calling for the introduction of a shareholder-nominated director system and corporate governance reforms.
On the 24th, Life Asset Management posted a statement on its website regarding the Financial Supervisory Service beginning preparations to inspect the process for selecting the next chair of BNK Financial Group.
Life Asset Management said, "As a shareholder, we express deep regret," and noted, "This is the result of remaining stuck in old practices and failing to reflect in time the shareholders' demand to improve the transparency and fairness of the process for selecting the next chair."
It continued, "BNK Financial's board members have so far been appointed by management or outside directors with shareholders' intent excluded, serving as a rubber stamp for management rather than representing shareholders' interests," adding, "A closed structure in which the board shares the same terms as management and selects the next management behind closed doors makes it hard to avoid criticism as an 'inner circle.'"
Life Asset Management argued that corporate governance must be fundamentally reformed by introducing a shareholder-nominated director system. The idea is to grant major shareholders with at least 3% equity the right to recommend outside directors.
Kang Dae-gwon, CEO of Life Asset Management, said, "Only by forming the next executive recommendation committee with a board that has secured independence through shareholder nominations and having that committee finalize the next chair candidates can market trust be restored."
He added, "The regular shareholders meeting in Mar. next year is an important opportunity not only to select the chair of BNK Financial Group but also to replace six of the seven outside directors."
Meanwhile, Life Asset Management recently said it expanded its equity in BNK Financial Group from the previous 3% to 4%. This meets the threshold to exercise, on its own, the shareholder proposal right (at least 3% equity) under the Commercial Act.