Activist hedge fund joins retail investors in protesting Sajo Group
Sajo Group’s owner family is facing another battle with a local asset management company in its forthcoming proxy season later this month, in addition to the group’s prolonged conflict with retail investors, according to industry officials, Tuesday.
Earlier this month, Tcha Partners Asset Management said in a regulatory filing that it asked for Sajo Oyang’s shareholders to entrust it with their voting rights for the general meeting of shareholders on March 24, so that it can pressure the fishery processor to increase dividends and delist from the KOSPI voluntarily to enhance its shareholder value.
“When Sajo Group acquired Sajo Oyang in September 2007, Chairman Ju Jin-woo reportedly said its stock price would rise from around 40,000 won ($32) to above 50,000 in the medium-to-long run, but after 15 years, its stock price fell sharply to around 10,000 won,” Tcha Partners managing director Kim Hyung-kyoon said in the filing.
Tcha Partners was founded in June 2019 by members of a team at Platform Partners Asset Management who exercised their shareholder rights to pressure Macquarie Korea Infrastructure Fund in 2018. It has continued shareholder engagement tactics on the local stock market.
The asset manager urged Sajo Oyang to pay 500 won per share in dividends, instead of 200 won decided by its board of directors last month. It also asked for Sajo Oyang’s voluntary delisting, saying that its listing along with its parent company has caused a conflict of interest. In addition, it demanded the appointment of a corporate governance expert as a nonexecutive director and the repurchase of stocks worth 10 billion won.
As of last September, Tcha Partners owned a 1.67 percent stake in Sajo Oyang, while minority shareholders had a collective 36.5 percent stake. Sajo Daerim and the group’s other affiliates, on the other hand, collectively owned a 60.6 percent stake in Sajo Oyang, so the asset manager is expected to face difficulties achieving its goal in the forthcoming meeting of shareholders.
However, its shareholder engagement seems to annoy Sajo Group’s owner family members, as they are also in a dispute with minority shareholders of Sajo Industries, who are threatening to file a lawsuit if the company refuses to accept their request to increase dividends at the general shareholders meeting next month.
The minority shareholders have asked the deep-sea fishery company to raise dividends to 1,500 won per share, instead of 300 won proposed by the company’s management.
Sajo Industries has been in conflict with its minority shareholders for more than a year, due to controversies over the group chairman’s oldest son Ju Ji-hong, who was promoted to vice chairman in January.