The conflict sparked by HMM employees' pushback against the government's policy to have shipping corporations transfer their headquarters to Busan is intensifying ahead of the company's regular shareholders meeting. Employees worry the largest shareholder will replace outside directors with friendly figures and force the headquarters transfer.
According to HMM on the 18th, in-house shareholders made up of employees are arguing that the board should withdraw the outside director nominees submitted for this regular shareholders meeting. HMM's in-house shareholders are a group that includes the employee stock ownership association, which holds 0.01% of the company's equity.
The outside director nominees are taking a cautious stance on the Busan transfer issue. Ahn Yang-soo, a former KDB Life Insurance president and an HMM outside director nominee, said in a call with ChosunBiz on the 17th regarding the company's headquarters transfer to Busan, "I have never thought about (HMM's Busan transfer issue)," adding, "I will be able to comment after I go to the company and hear the details."
Ahn also said about HMM's in-house shareholders opposing the outside director appointments, "The Korea Development Bank had been continuously involved with HMM from the beginning, so I don't know why the union side is opposing," adding, "I have nothing to say for now."
Ahn is a former vice president in the investment division at the Korea Development Bank and has served as president of KDB Life Insurance and as an advisor at Shin & Kim LLC. HMM's in-house shareholders oppose his appointment, pointing out that Ahn is a former vice president of the Korea Development Bank. The Korea Development Bank is HMM's largest shareholder.
They said, "Appointing Ahn flatly denies the board's basic principle of mutual checks," adding, "Planting a proxy of the controlling shareholder on the board is a regression in governance that prioritizes the controlling shareholder's convenience over the rights and interests of ordinary shareholders."
Another outside director nominee, Park Hee-jin, a professor at Pusan National University, also showed caution. In a call, Park said, "It is prudent not to state a position now on HMM's Busan transfer."
On the claim that amending the articles of incorporation to transfer the headquarters to Busan could constitute breach of trust, Park said, "I do not know the matter precisely, and I can comment after I review and study the relevant details."
HMM's in-house shareholders also expressed opposition to Park's nomination, saying, "At a time when the company faces the risk of a Busan transfer due to political pressure, appointing a professor based in the Busan region as an outside director is clearly a move to secure the transfer's legitimacy."
HMM's in-house shareholders said, "The board should immediately withdraw nominees who represent specific stakeholders," adding, "It should disclose to shareholders a transparent economic feasibility review report on the headquarters transfer discussion and restructure the board with figures who have maritime expertise and independence."
However, given HMM's equity structure, these nominees are likely to be appointed at the shareholders meeting on the 26th. HMM passes shareholders meeting resolutions with a majority of the voting rights of shareholders in attendance (with at least one-fourth of total issued shares), and the Korea Development Bank and the Korea Ocean Business Corporation (KOBC) hold 35.42% and 35.08% equity, respectively.
HMM employees, opposing the government's push for the transfer, plan to stage a general strike on the 2nd of next month in front of the Cheong Wa Dae Sarangchae. The HMM union has been holding rallies during lunchtime since on the 11th.
The HMM union said the government is trying to unilaterally convene an extraordinary shareholders meeting without labor-management agreement by using its status as the controlling shareholder and proceed with an amendment to the articles of incorporation to change the headquarters location, calling it an unfair labor practice and a breach of the duty of care.
HMM union Chairperson Jeong Seong-cheol said, "If the board resolves to amend the articles of incorporation to transfer the headquarters location at an upcoming meeting, we will hold it legally accountable and secure the right to legitimate industrial action to respond."