KT&G & Steel Partners Reengage in Management Battle

Source from:  Maeil Business Newspaper Jun 24 2007 06/26/2007

The second round business right battle has begun in KT&G, the domestic tobacco maker when Steel Partners Chief Warren Lichtenstein has vented complaints over KT&G's investing in Shinhan. KT&G has purchased about 3.5 million shares of Shinhan at 196.7 billion total on June 20. When Lichtenstein has been informed of KT&G's investment, he has sent an email to Kwak Young-gyun, Chief Executive of KT&G, saying "What business does KT&G have investing in Shinhan that is in a completely different industry?" and has warned the company that if the investment cannot raise the tobacco maker's share price, he should either sell the company or withdraw from the position. "The company has informed Lichtenstein' remarks to the board via a board of directors meeting at 9:00 am to decide upon purchasing Shinhan's stake. It is the first time that an acrimonious email has been sent to us since August, 2006," said an high official from KT&G. Steel Partners have eased the dispute over the business rights in August last year after accepting KT&G's proposal to ameliorate shareholder value. Steel Partners has responded arduously to KT&G's investment in Shinhan by explaining that the company has taken an defensive measure for its business rights. "Although we have no plan to buy KT&G shares for the time being, if needed, we will consider purchasing at an appropriate time. As one of the local companies, KT&G has every reason to receive our support," said an high official from Shinhan. Enditem