“Please manage to enhance shareholder value at Samchuly.”
“Appointing two advisors from Kim & Chang as outside directors could undermine the board's independence.”
On the 21st, at the annual general meeting of the energy corporation Samchuly, major executives and shareholders attending the meeting began to gather one by one at 9 a.m. at the Samchuly Building in Yeouido, Seoul.
On this day, Samchuly passed all five agenda items submitted to the general meeting, including the approval of the 2024 financial statements, amendments to part of the articles of incorporation, appointment of outside directors, appointment of an outside director as the audit committee member, and approval of the limit on director compensation.
The general meeting lasted about one hour and proceeded without major issues, but criticisms were raised regarding the approved agenda items, including shareholder requests and the appointment of outside directors.
The first priority was 'enhancing shareholder value.' A shareholder attending the general meeting suggested, “Samchuly should consider the interests of its shareholders more significantly, including stock price support and increasing cash dividends.”
In response, Lee Chan-hee, vice chairman and CEO of Samchuly, said, “We are reviewing various measures to enhance shareholder value.” He added, “While we can consider increasing dividends in the short term, we are more focused on enhancing the fundamental value of the corporation.” On that day, Samchuly decided to keep the cash dividend per share at 3,000 won, the same as the previous year.
About a week before the general meeting, issues regarding the appointment of outside directors, who play a role in overseeing and checking executives such as the major shareholders, were also raised. The proxy advisory firm Good Corporate Governance Research Institute recommended opposition to the appointment of outside directors at Samchuly on the 14th.
Currently, Samchuly is managed by professional managers, including Vice Chairman Lee Chan-hee and CEO Yoo Jae-kwon, while honorary chairman Lee Man-deuk, the second generation owner, oversees management. His daughter, Lee Eun-sun, vice president in charge of future businesses, and his nephew, Lee Eun-baek, president in charge of strategy, are also involved in the management of Samchuly as the third generation.
On that day, Samchuly reappointed Lee Dong-kyu, permanent advisor at Kim & Chang Law Office, as an outside director and appointed Kim Do-in, also a permanent advisor at the same firm, as a new outside director. They were also appointed as members of the audit committee. Lee Dong-kyu previously served as the Secretary-General of the Fair Trade Commission, while Kim Do-in is a former deputy director of the Capital Markets Accounting Division of the Financial Supervisory Service. As a result, two of the three outside directors at Samchuly are affiliated with Kim & Chang.
The Good Corporate Governance Research Institute pointed out, “Appointing two outside directors from the same law firm raises concerns about undermining the board's independence.”
In this regard, a Samchuly official noted, “Lee Dong-kyu is an expert in fair trade, and Kim Do-in is an expert in accounting and finance, with distinct roles,” and added, “They have no interests related to the largest shareholders of Samchuly and can contribute to enhancing the transparency and independence of the board as outside directors and audit committee members.”
Samchuly added 'performing research service projects' to its business objectives through amendments to part of its articles of incorporation. This is to carry out various national projects in the environmental sector. Samchuly has been building its capabilities in eco-friendly businesses, such as promoting resource recycling projects that generate heat and electricity using waste heat produced during waste incineration.
Meanwhile, Samchuly recorded revenues of 5.12 trillion won and operating profits of 114.3 billion won last year, representing a decrease of 9.5% and 34.4%, respectively, compared to the previous year.