Align Partners Asset Management said on the 12th that ahead of this year's regular shareholders meeting, it submitted shareholder proposals to place items on the agenda at the boards of Dentium, Gabia Inc., and SOLUM, respectively.
Align Partners noted that while all three companies have strong business competitiveness and financial performance, their corporate value is undervalued due to similar structural corporate governance weaknesses.
It said the three companies share a structure in which the controlling shareholder, as CEO or inside director, is directly involved in management and exerts considerable influence over the board, so the board's independent monitoring and oversight functions are not fully working.
CEO Lee Chang-hwan said, "Under such a structure, various problems can arise from conflicts of interest, and as a result, the company's interests may transfer to the controlling shareholder side through various means such as related-party transactions, dual listings, and excessive compensation, or lead to inefficient capital allocation."
Align Partners said that since investing in the three companies, it has delivered plans to enhance shareholder value and improve governance to the boards and management through private shareholder letters and in-person meetings. However, it said it decided to make shareholder proposals after concluding that there was a lack of willingness to address fundamental issues. It said it demanded improvements to corporate governance and shareholder value through shareholder proposals tailored to each company's situation.
Align Partners submitted shareholder proposals to Dentium regarding amendments to the articles of incorporation, the appointment of two outside director candidates, and matters related to director compensation. For Gabia Inc., it submitted proposals on appointing non-executive director candidate Jeon Byung-soo and independent director candidate Choi Se-young, and on matters related to CEO compensation.
For SOLUM, it submitted shareholder proposals on amendments to the articles of incorporation; the appointment of independent director candidates Seo Young-jae and Na Young-ho and auditor candidate Kwak Joon-ho; and matters related to director compensation.
Lee said, "Given each company's business characteristics and governance, these shareholder proposals request essential improvements to enhance each company's shareholder value and protect general shareholders," adding, "We expect each company's board to carefully consider the purpose of these proposals and make responsible decisions for all shareholders."