Lee Nam-woo, who was nominated as a new outside director for Coway as part of shareholder activism, announced his intention to withdraw. Align Partners, who recommended Lee, also agreed to his resignation after discussions.
On the 24th, Align Partners released a statement, “After discussions with us, candidate Lee Nam-woo has decided to withdraw from the candidacy for a Coway outside director post.”
Coway previously claimed that Lee Nam-woo held legal disqualifications, as he was already serving as an auditor at other non-listed companies, including Hansol Holdings and SBS. According to Article 542 of the Commercial Act and Article 34 of its Enforcement Decree, an outside director of a listed company should not hold positions as a director, executive officer, or auditor at more than two other companies. Non-compliance may result in losing the position.
Coway had issued a clarification on the 21st stating, “Lee holds positions as an outside director and auditor at listed companies Hansol Holdings and SBS, and is also serving as an auditor for the unlisted company AgileSoda.”
Align responded, “Upon facing Coway’s objection, we immediately confirmed the details with Lee, who explained there was a misunderstanding regarding the concurrent position restriction and promptly expressed his intent to resign from AgileSoda.”
Align assured that the legal disqualifications would be resolved, with the resignation scheduled to be completed before Coway’s general shareholder meeting on March 31, allowing Lee’s potential appointment without legal issues.
Ultimately, Lee decided to withdraw from the candidacy after discussions with Align to prevent unnecessary controversy from overshadowing the focus on enhancing company value (value-up) and governance improvements, which are crucial at this juncture.
Align emphasized that even if the shareholder-proposed director appointment is not realized immediately, adopting a cumulative voting system could effectively curtail excessive influence by the largest shareholder, Netmarble, who holds only a 25% stake, thus fostering a board structure that works for all shareholders.
Align warned that if the anticipated improvements in governance and capital allocation do not materialize following the introduction of cumulative voting, additional necessary actions could be taken.
Align criticized Coway’s actions, suggesting that instead of publicly posting information that included personal defamation on its website, Coway should have first verified the candidate’s credentials directly with Lee. Align perceives these actions as malicious and inappropriate.
Align reiterated that shareholder proposals aimed at enhancing shareholder value and governance are legitimate rights under law and expressed deep regret over Coway’s antagonistic response.