AK Partners, Voting Rights Exercise Rate 0%... Public Fund Neglecting Shareholders' Interests

Financial Supervisory Service Announces Q2 Public Fund Voting Rights Status
Public Fund Voting Rights Opposition Rate 5.7%
Lower Than National Pension Service (21.8%)
Stewardship Code-Adopting Asset Managers Opposition Rate 6.9%

The voting rights exercise rate of public offering funds in the second quarter of this year was recorded at 92.5%. However, the rate of dissenting votes was only 5.7%. This is lower than the dissenting vote rates of major pension funds such as the National Pension Service. In particular, asset management companies that have not adopted the Stewardship Code had a voting rights exercise rate of only 60.9%, and some asset management companies showed a dissent rate of 0%.

On the 10th, the Financial Supervisory Service announced that after reviewing the status of voting rights exercised by public offering funds on domestic companies subject to voting rights disclosure in the second quarter of 2024, the voting rights exercise rate was found to be 92.5%.

The dissenting vote rate of public offering funds was 5.7%. The dissenting vote rate of public offering funds has steadily increased from 0.7% in February 2023, 0.6% in the third quarter of 2023, 2.7% in the fourth quarter of 2023, to 5.0% in the first quarter of 2024.

In particular, the dissent rate on matters closely related to shareholder rights such as mergers, business transfers, and executive appointments was 7.9%, higher than the average. However, this is significantly lower compared to major pension funds such as the National Pension Service (21.8%) and the Government Employees Pension Service (11.4%).

The voting rights exercise rate of 14 asset management companies that adopted the Stewardship Code was 99.3%, higher than that of public offering funds. The dissenting vote rate was also slightly higher at 6.9%.

The voting rights exercise rate of three asset management companies (AK Partners, Yukyung PSG, and Aegis Asset Management) that did not adopt the Stewardship Code was only 60.9%, and the dissenting vote rate was 0%. The Financial Supervisory Service explained that the voting rights exercise rate is relatively low among asset management companies that have not adopted the Stewardship Code.

The Financial Supervisory Service stated, "As active shareholder activities such as private equity funds and activist funds have recently become an issue, the faithful exercise of voting rights by funds will play a more important role in the regular general meeting season in the first quarter of 2025," adding, "We will continue to encourage asset management companies to establish themselves as leaders of a sound corporate governance culture by promoting the disclosure of voting rights exercise status by asset management company for major agenda items."