S. Korean steelmaker POSCO CEO resigns; Chung Joon-yang Decides to Leave After Global Slump in Steel Industry Hits Earnings

Posco CEO Offers to Resign
Chung Joon-yang Decides to Leave After Global Slump in Steel Industry Hits Earnings
Nov. 15, 2013 4:40 a.m. ET
The chief executive of South Korea’s largest steelmaker, Posco005490.SE +0.62% has offered to resign after a protracted global slump in the steel industry hit its earnings. Chung Joon-yang, a 55-year-old veteran businessman, who has led the company since February 2009, has submitted his resignation letter to the board Friday, Posco said in a written statement.“Despite challenging business conditions, Posco has posted strong performances, but I’ve decided to leave so that a new leadership can lead Posco’s growth as a leading global company,” Mr. Chung said in the statement.

His resignation comes a couple of weeks after Lee Suk-chae, chief executive of Korea’s biggest fixed-line operator, KT Corp. 030200.SE +1.21% , resigned amid a corruption probe.

Mr. Chung said in the statement there has been no external pressure for him to leave.

Posco said it would soon form a CEO nomination committee, which will recommend a candidate at its shareholders meeting scheduled for March 14.

Mr. Chung will continue to work in his capacity until Posco’s shareholders approve his replacement, according a company spokesman.

Posco, the world’s fifth-largest steelmaker by output, last month posted its steepest quarterly fall in operating profit so far this year for the July-September period, hit by declining sales and a prolonged slump in steel prices.

Third-quarter operating profit fell 38% on-year to 633 billion won ($593 million), and sales declined 3.7% to 15.15 trillion won.

S. Korean steelmaker POSCO CEO resigns

4:25am EST

SEOUL (Reuters) – South Korean steelmaker POSCO (005490.KS: QuoteProfileResearchStock Buzz) said on Friday chief executive Chung Joon-yang is leaving, the second major management change in the country’s private sector in less than a month. The move comes after months of media speculation that he may come under pressure to quit because a new government led by President Park Geun-hye took office in February. KT Corp, South Korea’s biggest fixed-line operator, announced last week its CEO, Lee Suk-chae, was resigning after prosecutors raided its headquarters amid a widening corruption probe.

POSCO and KT Corp (030200.KS: QuoteProfileResearchStock Buzz) have often seen CEOs quit before their terms expire when a new government takes office because the companies were once state-owned and the government retains a large amount of influence over their operations.

“Despite challenging business conditions, POSCO has reported strong performances, but I’ve decided to leave so that a new leadership can lead POSCO’s growth as a leading global company,” Chung said in a statement. He said that there has been no external pressure for him to leave.

POSCO plans to form a CEO nomination committee, which will recommend a candidate at its shareholders meeting scheduled in March.

Local media reports said Park’s election campaign aide, Kim Jong-in, and SK Innovation (096770.KS: Quote,ProfileResearchStock Buzz) CEO Koo Ja-young, who was a former managing director at POSCO, are among the potential candidates to succeed Chung.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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