South Korea’s National Pension Service (NPS) has raised concerns about the independence of POSCO Holdings Inc.’s board of directors, criticizing their actions and decisions.

The criticism comes eight days after a regular board meeting was convened last week. During the meeting, POSCO Holdings decided to present the candidacy of the chairman nominee and other internal and external directors for shareholder approval at the upcoming annual general meeting scheduled for March 21.

POSCO Holdings’ external directors, all facing suspicions of lavish overseas business trips, are currently under investigation by the police.

Except for two directors who expressed their intention to resign upon the expiration of their terms later this year, the remaining five directors are set to continue their roles. With inadequate explanations about the overseas trips, NPS Chairman Kim Tae-hyun raised concerns about the procedural fairness in the appointment of external directors at POSCO.

“Lavish overseas business trips by outside directors raises questions about their independence in the past,” Kim said. “Without sufficient clarification or explanation, it is unclear how the re-nomination of outside directors by the board and related committees helps to enhance shareholder value.”

Kim had also previously called for fairness in appointing a new chairman for the steelmaker.

POSCO Holdings has seven external directors, including Park Heui-jae, Kim Sung-jin, Yoo Young-sook, Kwon Tae-gyun, Yoo Jin-nyeong, Son Sung-gyu, and Kim Jun-gi.

Among them, Yoo Young-sook and Kwon Tae-gyun, whose terms are expiring, were recently re-nominated after a board meeting.

Park Heui-jae, board chairman and external director, expressed his intention to resign the day after the board meeting.

The local business community is closely monitoring the potential impact of the pension fund’s response ahead of the March 21 annual general meeting.

The election of directors, a general resolution item, is expected to face a contentious vote requiring approval from at least half of the attending shareholders and a quarter of the total shares outstanding.

The dissenting voice from the largest shareholder, the NPS, could influence the sentiments of major institutional shareholders like the Government of Singapore Investment Corporation (GIC) and foreign or minority investors.

As of November 2023, the NPS holds a 6.71 percent stake in POSCO Holdings, making it the only majority shareholder with over 5 percent ownership.

By Cha Chang-hee, Cho Yun-hee, Chang Iou-chung, Minu Kim

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]