ID :
183190
Thu, 05/19/2011 - 17:16
Auther :
Shortlink :
https://oananews.org//node/183190
The shortlink copeid
S. Korea's state pension fund stresses need to exercise shareholder rights
(ATTN: RECASTS lead; UPDATES with response from business circle in last 5 paras)
SEOUL (Yonhap) - The head of South Korea's national pension fund stressed on Thursday the need to rigorously exercise its shareholder rights, sparking opposition from the business circle, which says the move would hurt the independence of private firms.
Controversy has heated up over whether pension funds should exercise their shareholder rights in the country's family-owned conglomerates since Kwak Seung-joon, a key presidential aide, brought up the issue last month.
"Exercising shareholder rights is a global trend and the essence of capitalism. The National Pension Service (NPS) has the need to review positively the exercise of its shareholder rights," NPS Chairman Jun Kwang-woo said.
Jun said the NPS, which has 330 trillion won (US$303.6 billion) in assets, has an obligation to preserve and boost the value of the fund under management.
"As the NPS is a long-term investor, it cannot help but having an interest in whether companies operate their business with a sense of responsibility," he said.
Kwak argued that pension funds should start exercising their shareholder rights more actively to prevent large companies from falling into complacency, sparking complaints from the business community.
The head of the Presidential Council for Future and Vision said public funds could serve as a "catalyst" for the South Korean economy in improving corporate governance as they could work as a counterbalance to powerful conglomerates known here as chaebol.
"Pension funds' exercise of shareholder rights never aims to intervene in management of private companies," Kwak said.
But the business circle claimed that the move could hamper the independence of private companies and the government could wield its influence through pension funds.
Some have raised speculation that the NPS's move to reinforce shareholder rights may be part of the political circle's attempt for chaebol bashing ahead of the general election next year.
The country's major business organizations said there should be a mechanism to prevent any political influence on decisions made by public funds in exerting shareholder rights.
"If public funds intervene in companies' decision-making process, this is feared to hurt the corporate value. If the NPS tries to excessively exert its shareholder rights, it could only give impressions that the government is seeking to control companies," said an official at the Korea Chamber of Commerce and Industry.
But Jung Byung-chul, vice chairman of the Federation of Korean Industries (FKI), the largest industry lobby in South Korea, made comments slightly different from those by the majority of the business organizations.
"As the NPS has already exercised its shareholder rights, no one would object to the pension fund's move," Jun said.
SEOUL (Yonhap) - The head of South Korea's national pension fund stressed on Thursday the need to rigorously exercise its shareholder rights, sparking opposition from the business circle, which says the move would hurt the independence of private firms.
Controversy has heated up over whether pension funds should exercise their shareholder rights in the country's family-owned conglomerates since Kwak Seung-joon, a key presidential aide, brought up the issue last month.
"Exercising shareholder rights is a global trend and the essence of capitalism. The National Pension Service (NPS) has the need to review positively the exercise of its shareholder rights," NPS Chairman Jun Kwang-woo said.
Jun said the NPS, which has 330 trillion won (US$303.6 billion) in assets, has an obligation to preserve and boost the value of the fund under management.
"As the NPS is a long-term investor, it cannot help but having an interest in whether companies operate their business with a sense of responsibility," he said.
Kwak argued that pension funds should start exercising their shareholder rights more actively to prevent large companies from falling into complacency, sparking complaints from the business community.
The head of the Presidential Council for Future and Vision said public funds could serve as a "catalyst" for the South Korean economy in improving corporate governance as they could work as a counterbalance to powerful conglomerates known here as chaebol.
"Pension funds' exercise of shareholder rights never aims to intervene in management of private companies," Kwak said.
But the business circle claimed that the move could hamper the independence of private companies and the government could wield its influence through pension funds.
Some have raised speculation that the NPS's move to reinforce shareholder rights may be part of the political circle's attempt for chaebol bashing ahead of the general election next year.
The country's major business organizations said there should be a mechanism to prevent any political influence on decisions made by public funds in exerting shareholder rights.
"If public funds intervene in companies' decision-making process, this is feared to hurt the corporate value. If the NPS tries to excessively exert its shareholder rights, it could only give impressions that the government is seeking to control companies," said an official at the Korea Chamber of Commerce and Industry.
But Jung Byung-chul, vice chairman of the Federation of Korean Industries (FKI), the largest industry lobby in South Korea, made comments slightly different from those by the majority of the business organizations.
"As the NPS has already exercised its shareholder rights, no one would object to the pension fund's move," Jun said.
