Icahn reportedly told KT&G at the end of last year to sell off its ginseng subsidiary to boost the stock price, raising fears of another management conflict with an overseas fund here after the sorry tale of Sovereign Asset Management’s bid to seize control of SK Corporation last year.

The billionaire’s Icahn Partners Master Fund, registered in the placid tax haven of the Cayman Islands, said Friday it bought 10.7 million shares of KT&G, acquiring 6.59 percent of the company for the purpose of taking part in managing the company.

The fund, virtually owned by Icahn, became the third biggest shareholder after Industrial Bank of Korea, which holds 15.84 percent including treasury stock, and Franklin Mutual Advisers, which owns 7.14 percent.

The fund will exercise its right to vote in a general meeting of shareholders, it said in its report to the Financial Supervisory Service. Anyone acquiring a stake of more than 5 percent is required to declare the purpose to the Korean financial authorities.

Icahn’s name strikes fear into the hearts of many who recall his hostile takeovers of large companies like the moribund U.S. carrier TWA and steelmaker USX. More recently, he pressured the world’s biggest media conglomerate Time Warner to buy back its stocks.

Stock market pundits believe Icahn is trying to gain managerial control of KT&G. Besides demanding the ginseng business sale, he also sent representatives last year demanding the firm sell off real estate and increase dividends.

KT&G’s management owns only a small stake, with 61.78 percent of the company owned by foreign investors. Its biggest shareholder Industrial Bank of Korea can exercise voting rights for just 5.9 percent of the stock.

One analyst with a local securities firm points out that KT&G shares, unlike SK’s, are not cheap, and predicts Icahn will attempt to throw in its lot with other foreign investors rather than try to control the company by itself.

(englishnews@chosun.com )