Chairman Intervention Rumors and Political Connections... Posco Caught in Controversy Again

POSCO 범대위 "Choi Jung-woo, Access to Huchu Committee Meeting"
POSCO Announces Strong Legal Action Against Rumors
Time to End Chronic Issues of Ownership-Dispersed Companies

As the final interviews for the six candidates for the next chairman of the POSCO Group approach, controversies surrounding the selection process and the candidates are resurfacing once again. Following allegations of the current chairman's interference in the candidate selection, suspicions of some candidates' political connections have emerged, making the competition increasingly chaotic. Voices are rising that the chronic problems of 'widely held companies' that recur every time a chairman is elected must now be put to an end.

According to industry and political circles on the 5th, suspicions have recently arisen that the current management illegally intervened in the operation of the CEO Candidate Recommendation Committee. The Pohang civic group, 'POSCO Headquarters and Future Technology Research Institute Headquarters Pohang Relocation Pan-Citizen Countermeasure Committee (Pan-Committee),' filed a complaint with the Seoul Metropolitan Police Agency on the 2nd against POSCO Holdings Chairman Choi Jeong-woo and Pan-Committee Chairman Park Hee-jae on charges of obstruction of business.

The Pan-Committee alleged that Chairman Choi illegally visited the Pan-Committee meeting room on the 31st of last month, where candidate selection was being reviewed, and interfered in the candidate selection process. They claimed that Chairman Choi demanded the exclusion of certain candidates, and the Pan-Committee adjusted the candidate pool according to his demands.

POSCO Holdings strongly denied these claims as 'rumors' and announced plans for vigorous legal action. In a statement, POSCO Holdings explained, "From 10 a.m. to around 12 p.m. on that day, the POSCO Holdings settlement board meeting was held at the POSCO Center in Seoul, and Chairman Choi and other inside directors moved to a lunch venue after the meeting." They added, "The seven Pan-Committee members had a separate lunch and then held the 8th Pan-Committee meeting," and refuted, "Chairman Choi did not visit the Pan-Committee meeting room after the board meeting."

POSCO also internally reviewed CCTV footage to track Chairman Choi's departure route, confirming that he left the company precisely at 6:01 p.m., and multiple employees who witnessed his departure at that time were also identified.

Kim Dong-seop, president of Korea National Oil Corporation and considered an unexpected figure among the final candidates, is not free from controversy either. Kim is alleged to be a 'parachute' appointee due to his connection with Lee Gwan-seop, chief secretary of the presidential office, as they graduated from the same high school.

Born in 1957, Kim graduated from Gyeongbuk National University High School and Seoul National University with a degree in Naval Architecture and Ocean Engineering. Lee's older brother, Lee Jong-seop, CEO of Daemyeong Industrial Company, is also reported to have graduated from the same high school.

The controversy surrounding Kim intensified as Kim Young-seop, the current KT chairman (born 1959), is also an alumnus of Gyeongbuk National University High School.

In a phone interview with Asia Economy, Kim Dong-seop dismissed the 'parachute' allegations, stating, "I do not know (Lee's older brother) at all, I don't even know who he is. I have never met, talked to, or called him," denying any connection.

The finalists for the in-depth interview for the next POSCO Group chairman include three current and former 'POSCO men' (Kim Ji-yong, Jang In-hwa, Jeon Jung-seon) and three outsiders (Kwon Young-soo, Kim Dong-seop, Woo Yoo-cheol). The Pan-Committee plans to conduct interviews on the 7th and 8th, finalize and announce the single final candidate on the 8th. Unless there are unexpected developments, the final candidate appointment will be submitted to the shareholders' meeting scheduled for the 21st of next month.

Professor Cho Myung-hyun of Korea University Business School said, "Widely held companies like KT and POSCO are experiencing conflicts in governance changes, but as more companies fail to secure succession, similar problems are likely to arise," adding, "The KT method, which requires more than 60% approval of total voting shares, could be a short-term solution."