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Mon, Nov 08, 2004 - Page 12 News List

South Korean oil company chairman faces legal action


A Monaco-based fund which holds a stake in SK Corp threatened yesterday to take legal action against a corruption-tainted chief executive at the company, South Korea's largest oil refiner.

The warning came after Sovereign Asset Management, which holds a 14.9 percent stake in SK Corp, was refused a special shareholders meeting to revise rules and to dismiss chairman Chey Tae-won.

SK Corp's board rejected Sovereign's call Friday.

"Sovereign will now ask the Korean courts to perform the fiduciary and stewardship responsibilities which SK Corp's directors are unwilling to undertake," Sovereign's chief executive officer James Fitter said in a statement.

Sovereign insists that shareholders should be allowed to vote on whether convicted criminals or those indicted for serious crimes should be allowed to act as directors of SK Corp.

Chey, 42, was sentenced last year to three years in prison for illicit dealings and accounting aimed at tightening his control over SK Corp and its parent SK Group, South Korea's third largest family-run conglomerate.

He was freed on bail pending an appeal and remains SK Corp chairman.

SK officials described Sov-ereign's application as an attempt to strengthen its position before next year's general meeting.

Sovereign has denied seeking a hostile takeover.

"Sovereign has never sought control of SK Corp. Sovereign's responsibility is to ensure that SK Corp's board of directors is genuinely accountable to the company's shareholders," the international fund said in the statement.

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