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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] South Korea’s National Pension Service (NPS) is facing potential valuation losses on its increased stake in E-Mart following a recent controversy involving its subsidiary Starbucks Korea, drawing market attention to whether the pension fund will actively exercise its stewardship code.
According to regulatory filings, the NPS raised its stake in E-Mart to 8.94% in February while reducing most of its holdings in Coupang as part of a portfolio reshuffle. The move was seen as a bet on undervalued offline retail recovery.
However, E-Mart’s share price has since fallen sharply—from around KRW 130,000 to KRW 92,000—raising concerns over investment losses of roughly 30% within three months. The decline follows controversy surrounding Starbucks Korea’s “Tank Day” marketing campaign, which exposed weaknesses in E-Mart’s internal controls over affiliates.
E-Mart has issued a public apology and pledged process improvements, acknowledging failures in its internal approval system. Still, critics argue that deeper governance reforms are needed, noting the absence of a centralized control tower to manage subsidiary risks despite E-Mart’s de facto holding company role.
Market participants are now closely watching whether the NPS, as the second-largest shareholder, will push for structural changes through active shareholder engagement.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
