Truston Asset Management has withdrawn its shareholder proposal at the regular general shareholders' meeting, welcoming KCC's policy of burning treasury stocks and securitizing investment assets.
On the 16th, Truston Asset Management said, "The board of directors of the KCC has proposed principles for treasury stock retirement, securitization of assets for investment, and shareholder return," adding, "We have decided to withdraw the shareholder proposal that was proposed at the regular shareholders' meeting." As of this day, Truston's stake in KCC is 1.88%.
Truston explained that it received an official official letter from KCC stating that it would sell assets held for investment purposes at an appropriate time and return some of the profits from the sale to shareholders.
Currently, KCC holds stakes in listed companies such as Samsung C&T for investment purposes. As of the 16th, the asset valuation is about 5.264 trillion won, exceeding KCC's market capitalization of 4.541 trillion won. In particular, the stake in Samsung C&T is recognized as a friendly stake in Samsung Group and is unlikely to be sold. For this reason, investment assets have been pointed out as a factor for undervaluation of stock prices.
An official from Truston Asset Management said, "This decision will be an important milestone in that the KCC board has begun to substantially reflect the rational voices of ordinary shareholders in its management." KCC's official announcement of the possibility of selling investment assets and willingness to return shareholders is significant. The company also conveyed its position that it will also consider returning shareholders on a consolidated basis if the performance of its core subsidiary Momentive is normalized.
Earlier last month, Truston sent an open shareholder letter to KCC to present a shareholder proposal calling for the liquidation of shares in Samsung C&T and the retirement of treasury stocks. However, it is explained that the company withdrew its proposal because it decided that it had accepted a large part of its core demands by announcing its plan to incinerate treasury stocks and liquidate investment assets.
KCC announced in a public announcement on the 9th that 1,174,300 of its 1,532,300 shares will be incinerated in installments by September next year, excluding compensation for executives and employees.
Amid increasing demands for shareholder returns by activist funds and minority shareholders in the recent shareholders' meeting season, the case is evaluated as a case in which the conflict was closed as companies accepted some of the demands. "We decided that the KCC accepted most of the core contents of the shareholders' proposal, so we chose constructive cooperation instead of unnecessary confrontation," a Truston official said. "We plan to continuously check the schedule of handling investment assets and communication with the market in the future."
