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A hostile takeover bid by the U.S. corporate raider Carl Icahn and partners for Korea¡¯s biggest tobacco firm KT&G saw a setback on Tuesday, when a court threw out an application by the billionaire investor to stop KT&G from electing a new board at its annual shareholder meeting this month. The move was the latest gamble by Icahn and fellow investor Warren Lichtenstein of Steel Partners in their continuing war of nerves with the company.
The Daejeon District Court led by Chief Justice Kwon Soon-il rejected Icahn¡¯s argument that the company illegally tried to limit the number of directors the U.S. investors can push on the board. The bench ruled the decision how many members to nominate and how to vote lies with company management.
As a result, Friday¡¯s annual general meeting will select two outside directors and four audit directors in separate ballots. KT&G has recommended two candidates for the outside directorships and four for audit directorships, while Icahn and partners have nominated three outside directors for the two available positions.
The Wall Street Journal on Monday pitched into the debate, saying the takeover bid showed that Korea¡¯s old-style family-owned conglomerates or chaebol -- with their lack of transparency and high-handed management style -- face disaster if they refuse to reform.
In an editorial, the paper said Korean companies remain unfriendly to foreign investors and warned that the opening of the Korean economy will give the likes of Icahn ample opportunity to squeeze companies that stick to their outdated management style.
(englishnews@chosun.com )
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