Kumho Petrochemical Ends 'Joka's Revolt'... Focuses on Strengthening Fundamentals and "Enhancing Technology Management"

Park Junkyung Reappointed as Inside Director
Park Cheolwan Makes No Shareholder Proposals
Special Relationship with Chah Partners Dissolved
"Nephew's Revolt" Management Dispute Comes to an End

With Park Cheol-wan, the largest individual shareholder who had been in conflict with Park Chan-gu, chairman of Kumho Petrochemical Group, refraining from exercising voting rights at this year's shareholders' meeting, the four-year-long management dispute known as the 'Nephew's Revolt' has come to an end. As all the agenda items proposed by the company were passed, Kumho Petrochemical plans to focus on its core business and enhance competitiveness in new ventures to respond to the stagnant petrochemical market.

At the Kumho Petrochemical regular shareholders' meeting held on the morning of the 25th at the Signature Tower East Building in Jung-gu, Seoul, agenda items such as the reappointment of Park Jun-kyung, president of Kumho Petrochemical and son of Chairman Park, as an inside director, and the appointment of four outside directors were approved.

On the morning of the 25th, Baek Jong-hoon, CEO of Kumho Petrochemical, is speaking at the regular shareholders' meeting of Kumho Petrochemical held at the Signature Tower East Building in Jung-gu, Seoul. Photo by Kumho Petrochemical

Park, the former executive director, who did not submit any separate shareholder proposals at this year's meeting, was reportedly absent from the venue. Following this shareholders' meeting, the management dispute surrounding Kumho Petrochemical, which lasted over four years and was known as the 'Nephew's Revolt,' is considered to have effectively ended.

Park Cheol-wan is the eldest son of the late Park Jung-gu, former chairman of Kumho Group, and nephew of Chairman Park Chan-gu. He currently holds a 9.51% stake in Kumho Petrochemical based on common shares. As the largest individual shareholder, Park Cheol-wan initiated the management dispute in 2021 by dissolving the joint shareholding and special relationship with Chairman Park. Subsequently, in the 2021 and 2022 shareholders' meetings, he proposed agenda items to appoint himself as an inside director, but these were rejected in voting battles.

In 2022, he delegated rights to the activist fund Chah Partners and jointly proposed shareholder proposals including the complete cancellation of treasury shares and the recommendation of outside directors. However, all proposals were rejected, and the outside directors recommended by Chah Partners were not appointed, resulting in a failed management takeover attempt. On the 27th of last month, the joint shareholding agreement between Park Cheol-wan and Chah Partners was also terminated.

Park's sisters, Park Eun-hyung and Park Eun-hye, have also stepped back from the management dispute by selling their shares. They sold 11,500 shares between January and February, reducing their stake by 0.04 percentage points. At the end of last year, they also sold 46,760 shares of Kumho Petrochemical.

The shareholders' meeting proceeded smoothly from the proposal of agenda items to voting, with most items passing with a high approval rate exceeding 90%. This solidified Chairman Park's management rights, and the approximately 20 shareholders attending the meeting raised no objections.

Baek Jong-hoon, CEO of Kumho Petrochemical, stated, “The ongoing global oversupply and the uncertainty in the trade environment due to the inauguration of Trump's second term will be challenges testing the survival and sustainability of our petrochemical industry.” He added, “However, the company will not be deterred and will proactively manage risks and respond actively to market changes to overcome the crisis and create opportunities for a new leap forward by strengthening technology management.” He further explained, “Based on the company's three major growth strategies?strengthening eco-friendly automotive solutions, expanding bio-sustainable materials, and accelerating the conversion of all products to high-value specialty chemicals?we will actively pursue improving the structure of existing businesses and securing new growth engines.”