Electronic components manufacturer SOLUM is embroiled in friction over introducing electronic voting for its shareholders meeting. Small shareholders have been demanding mandatory introduction of electronic voting since last year, but the board opposes it, citing expense.
Electronic voting is a system that allows shareholders to exercise their voting rights online without visiting the venue of the shareholders meeting in person, and is considered one of the easy ways to help individual shareholders exercise their voting rights. In particular, as the financial authorities emphasized protecting the rights and interests of general shareholders as a key pillar of revitalizing the domestic stock market, many listed companies introduced electronic voting to expand shareholder rights.
SOLUM held its regular shareholders meeting at 10 a.m. on the 31st in Cheoin-gu, Yongin, Gyeonggi. This shareholders meeting drew attention as SOLUM accepted governance improvement measures demanded by the activist fund Align Partners Asset Management.
SOLUM accepted Align's demands and decided to form a highly specialized and independent board. Through amendments to its articles of incorporation, it decided to make a majority of the board independent directors and to establish bodies such as an internal transactions committee composed entirely of independent directors.
It also decided on its first cash dividends since the company was founded. Regarding the dividends decision, the company said, "As part of expanding shareholder return policies following last year's cancellation of treasury shares, it is a decision to enhance shareholder value."
The point of contention is the introduction of electronic voting demanded by small shareholders. At this shareholders meeting, small shareholders proposed an agenda item for "mandatory exercise of voting rights by electronic means."
However, the board opposed the agenda item, citing the occurrence of expense. The company's stance is that agenda items can be handled if voting rights are exercised on-site at the shareholders meeting, so there is no need to incur expense to introduce electronic voting.
The board also sees mandating electronic voting as excessive management interference. Under the amended Commercial Act, listed companies with assets of 2 trillion won or more must introduce electronic voting starting next year, but for other listed companies, introducing electronic voting is a matter for a board resolution. As of the fourth quarter of last year, SOLUM's asset size was about 1.2 trillion won.
Accordingly, as with last year, SOLUM's introduction of electronic voting has been derailed at this shareholders meeting. And the board tabled a board-proposed agenda item stating that the company would hold the meeting on the day of the shareholders meeting with shareholders attending the convened venue in person.