[Aju News DB]
SEOUL -- South Korea's health minister called for the cautious exercise of a new system called "Stewardship Code," which was introduced last year to make institutional investors active and engaging in corporate governance in the best interests of shareholders.
Health and Welfare Minister Park Neung-hoo said in parliament Friday that the National Pension Fund would never intervene in private business activities unfairly. "Only one goal is to improve the long-term profitability of its operation."
For many years, the state-controlled pension fund with 630 trillion won ($562 billion) in assets has been criticized for being too cozy with large corporations or having blindly voted in line with management. To improve corporate governance, the fund introduced the stewardship code last year.
"The stewardship code should be based on rigorous and objective data in applying it," said Park, who heads the pension fund's management committee which has yet to determine if the fund needs to actively wield its voting rights as a key shareholder in Hanjin, a conglomerate stricken by scandals involving its ruling family.
"The stewardship code is a double-edged sword. If recklessly exercised, it would restrict private business activities," Park said. "We will use it properly to help private enterprises operate morally without unnecessary government interference."
As South Korea's largest institutional investor, the pension fund holds a 7.34 percent stake in Hanjin KAL, the holding company of the Hanjin group controlled by Cho Yang-ho, and 11.56 percent in the group's crucial wing, Korean Air.
Hanjin was hit hard by a scandal involving the chairman's youngest daughter, Cho Hyun-min, who allegedly threw a glass cup and sprayed plum juice during a business meeting with advertising agency officials. The scandal fueled public anger, leading to multiple investigations into the chairman, his wife and children on charges of creating a slush fund, evading taxes, bringing in luxury foreign goods illegally, abusing and assaulting company employees and others. No one has been arrested.
reporter
Lim Chang-won
cwlim34@ajunews.com
