ISS, the World’s Largest Proxy Advisory Firm, Also Recommends Voting AGAINST
Flashlight Capital Partners Pte. Ltd. (“Flashlight Capital”), a shareholder of KT&G Corporation (KRX: 033780) (“KT&G”), announced its strong opposition to KT&G’s proposal (#2-3) to dismantle the cumulative voting system for CEO elections, set for discussion at the 2025 Annual General Meeting (AGM) on March 26, 2025.
Flashlight Capital criticized the proposal as a blatant attempt to secure CEO Kyung-Man Bang’s reappointment, arguing that it directly undermines the fundamental purpose of the cumulative voting system and severely damages shareholder value.
“As a board member, the CEO should be subject to the same cumulative voting system as any other directors,” said Sanghyun Lee, CEO of Flashlight Capital. “This attempt to exempt himself from fair shareholder oversight is nothing more than a scheme to secure a lifetime appointment, just as his predecessor, CEO Baek, did.”
CEO Bang was elected in March 2024, with just 50.9% of the vote, a humiliating outcome given KT&G’s insider-controlled shares. Excluding 13% of insider-controlled shares, his actual support from independent shareholders was only 38%.
“If Bang is embarrassed by his 38% approval, he should prove his competence through performance,” Lee stated. “Attempting to extend his tenure through bylaw changes is not only unmanly but also deeply disappointing.”
On March 11, 2025, ISS, the world’s largest proxy advisory firm, also issued a clear recommendation against KT&G’s proposal.
Currently, the National Pension Service (NPS) and the Industrial Bank of Korea (IBK) are KT&G’s major institutional shareholders. Flashlight Capital emphasized that these two government-affiliated institutions must exercise their voting power responsibly to protect shareholder rights.
FCP pledged to continue informing both Korean and international investors about KT&G’s governance issues and to push for structural reforms that enhance efficiency and shareholder value. “For KT&G to become a globally competitive company, transparency and shareholder value enhancement must be the top priorities,” said Lee. “This attempt to entrench the CEO’s power through bylaw manipulation is unjustifiable under any circumstances.”
About Flashlight Capital
Flashlight Capital Partners Pte. Ltd is an investment management firm founded by the Carlyle Group’s former Head of Korea, Sanghyun Lee. Flashlight Capital is dedicated to strengthening corporate governance and enacting transformative change to its portfolio companies. For more information about Flashlight Capital, please visit www.FlashlightCap.com and YouTube channel (https://www.youtube.com/@flashlightcapitalpartners7001).
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