Sovereign Asset Management ("Sovereign") is concerned by statements expressed by Sohn Kil-Seung, Chairman of SK Group on Wednesday May 28th stating "[SK Group] will save SK Global under any circumstances. Now is the time to bring together all the power of SK to achieve the normalization of SK Global".
Sovereign has already expressed its strong opposition to any plans by SK Corporation to support SK Global in any way that is not based solely on commercially sound principles. Sovereign questions the legitimacy of the SK Group to call on SK Corporation to participate in their normalization plan "under any circumstances". The SK Group is not a shareholder of SK Corporation and is not even a legal entity. We therefore challenge its authority to negotiate on SK Corporation's behalf or attempt to bind it to any decision making process.
Rather it is the responsibility of the directors of SK Corporation to act in the interest of its shareholders and we remind them of SK Corporation's own statement that the company would "not provide any unreasonable support to any SK Group-related companies, including SK Global".
James Fitter, Chief Operating Officer of Sovereign notes "To date we have not yet seen any evidence that suggests that the current discussions around the restructuring of SK Global will result in the creation of a financially viable entity."
SK Global has reported a negative net worth of KrW4.4T. No justification has yet been given as to why investors can have any confidence in the long-term viability of SK Global's business model without the undue, non-commercial support of affiliated companies.
As such Sovereign will continue to monitor the situation closely and will take any actions necessary to protect the interests of all SK Corporation's shareholders including holding the board of directors responsible for their actions. Sovereign will support SK Corporation directors in their steps to build a strong and independent company based on the creation of shareholder value through improved corporate governance and transparency.
In light of this Sovereign is pleased to announce the appointment of Myungin Law Firm ("Yoon & Han") as legal advisor to Sovereign in Korea. "Myungin has extensive experience in corporate governance and shareholder rights issues. Together with our financial advisor Lazard, they will be invaluable in assisting us in dealing with the challenges facing SK Corporation." said James Fitter.
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