[Alpha Biz= Kim Jisun] Coway has rejected key governance demands raised by activist shareholder Align Partners, including a call for Chairman Bang Jun-hyuk to step down voluntarily to address potential conflicts of interest with controlling shareholder Netmarble.
According to industry sources on Friday, Coway said in a recent response letter that it would be difficult to accept Bang’s voluntary non-reappointment, citing his management capabilities and track record. The company argued that Bang is not merely a representative of the largest shareholder but serves as a key strategic leader overseeing digital transformation, product innovation, global expansion and new growth initiatives.
Coway maintained that Bang’s dual role as chairman of both Coway and Netmarble does not constitute a material conflict of interest that disadvantages Coway. It also said that excluding him from reappointment as an inside director would be a formalistic measure unlikely to resolve governance concerns, adding that any decision on his tenure should be made through a shareholder vote rather than at the request of a single investor.
Align Partners, which owns about 4% of Coway, said it is reviewing the company’s response. In December, the activist fund sent a shareholder letter outlining seven proposals, including clearer long-term valuation and return-on-equity targets, a more concrete capital structure policy, enhanced shareholder returns, stronger investor relations, improved board independence, mitigation of conflicts with the controlling shareholder, and closer alignment between executive compensation and share performance.
Coway made clear that it does not intend to accept the proposal related to resolving potential conflicts with the controlling shareholder, the most contentious issue raised by Align. The fund had previously warned that it would actively exercise its rights as a shareholder if Coway failed to present a meaningful stance.
Attention is now turning to Coway’s annual general meeting scheduled for late March, where Align Partners—known for its activist campaigns at companies such as SM Entertainment and STIC Investments—may escalate pressure through shareholder proposals or board nominations.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
