Cha Partners Proposes Shareholder Actions Including Appointment of Professor Lee Sang-hoon from Kyungpook National University as Auditor at Sajo Oyang Co., Ltd.

[Asia Economy Reporter Park Soyeon] Cha Partners Asset Management Co., Ltd. (hereinafter Cha Partners) has taken action to exercise shareholder rights ahead of the regular general meeting of shareholders of Sajo Oyang. Cha Partners holds a 1.7% stake in Sajo Oyang Co., Ltd. through funds under its management.

On the 15th, Cha Partners publicly proposed measures to enhance shareholder value against Sajo Oyang, including the appointment of independent audit committee members and amendments to the articles of incorporation to establish an independent board of directors. Cha Partners plans to engage in a vote battle at the Sajo Oyang regular general meeting of shareholders scheduled for the 24th.

The shareholder proposal includes ▲ the appointment of independent audit committee members who can oversee the board of directors (Professor Lee Sang-hoon of Kyungpook National University Law School) ▲ amendments to the articles of incorporation to establish an independent board of directors (such as the introduction of cumulative voting) ▲ voluntary delisting to resolve structural conflicts of interest caused by simultaneous listing of parent and subsidiary companies ▲ a cash dividend of 500 KRW per share and the repurchase of treasury stock worth 10 billion KRW to enhance shareholder value.

Cha Partners pointed out that when a parent company and its subsidiary are both listed, structural conflicts of interest inevitably arise. Last year, Sajo Oyang acquired a large amount of shares in Sajo Industry, which was in conflict with minority shareholders, resulting in an evaluation loss of about 3 billion KRW. This is a representative example of such conflicts of interest.

To resolve the company’s undervaluation issue and enhance shareholder value by ensuring that the board of directors operates for the benefit of all shareholders, Cha Partners proposed the appointment of independent audit committee members separate from the board. Cha Partners proposed Professor Lee Sang-hoon of Kyungpook National University Law School as a candidate for the audit committee, describing him as the best authority in Korea on directors’ fiduciary duties under commercial law and the optimal candidate for establishing an independent board of directors.