Shareholder Proposal by Chul Whan Park, Largest Individual Shareholder of Kumho Petrochemical, Receives Positive Response from the World's Top Sovereign Wealth Fund

As well as from Corporate Governance Experts and Analysts

• NBIM, manager of the world's largest sovereign wealth fund, and CalPERS, the largest public pension in the US, stand in favor of most of the agendas proposed by Park
• CGCG recommends in its analysis to vote for Park as inside director, revision of AoI, outside directors, etc.
• Expert group publishes a report to conclude "Shareholder Park is trying to 'do the right thing'"

SEOUL, South Korea, March 24, 2021 /PRNewswire/ -- The shareholder proposal submitted by Chul Whan Park, a senior executive and largest individual shareholder of Kumho Petrochemical, is receiving support from the world's top sovereign and pension funds as well as Korean and overseas corporate governance expert groups and analysts, with the upcoming annual general meeting (AGM) of shareholders scheduled on March 26^th.

Norges Bank Investment Management (NBIM) which runs the world's largest sovereign wealth fund, Government Pension Fund Global (GPFG), and is one of the major shareholders of the company, disclosed its voting decisions for the upcoming AGM on its website on March 23^rd (local time in Norway). NBIM is well-known for its socially responsible investment and according to the announcement, voted for almost all the agendas proposed by Park. While voting against all director nominees submitted by the company, NBIM gave support to three of the director nominees from Park's shareholder proposal – Park, himself as inside director, and Min John K and Byung Nam Rhee as outside directors and audit committee members.

California Public Employees' Retirement System (CalPERS), the largest public pension fund in the US, also voted for most of the agendas proposed by Park, including #Dividend payout, #Separating roles of CEO and chairman of the board of directors, #Establishment of Internal Transaction Committee and Compensation Committee with constitution of their roles and authority, #Appointment of Park himself as inside director, #Appointment of Min John K as outside director and audit committee member, etc.

In response to the investors' supports, Park said "NBIM and CalPERS are not only known for their global-scale investment, but also for their high ESG standards", and added, "Their support for my shareholder proposals is a clear indication of their concerns as shareholders about the company's governance issues."

On March 22^nd, Center for Good Corporate Governance (CGCG), a think tank devoted to improving corporate governance system in Korea, published an analysis on agendas for Kumho Petrochemical's AGM, with recommendation to vote for the agendas proposed by Park including #Separation of CEO and chairman of the board of directors, #Establishment of Internal Transaction Committee and Compensation Committee with constitution of their roles and authority, #Appointment of Park himself as inside director, and #Appointment of Min John K, Benjamin Joe (Yong Bum Cho), and Jung Hyun Choi as outside directors and audit committee members.

Moreover, CGCG's analysis found the agenda in shareholder proposal on separating the roles of CEO and chairman of the board and to appoint the chairman from outside directors, has higher relevance in terms of securing independence of the board.

With regards to dividend payout, CGCG explained "both dividend payout agendas proposed by Park and the company seem to have logical grounds, but according to the company's disclosure, they are incompatible, and shareholders can only choose one of the two agendas", which is why the report stood in favor of the company's dividend payout proposal.

Experts from both inside and outside Korea also made assessments. Analyst Douglas Kim of Smartkarma, a US-based independent research network, ran an analysis report and concluded "Park is trying to 'do the right thing' in improving shareholder value of Kumho Petrochemical by introducing higher standards corporate governance practices as well as enhanced value of existing assets". He also added that this is one of the most rare and interesting cases of shareholder engagement in Korea in the past decade.

In Korea, Yuanta Securities ran a report and said, "The company's stock rises when the situation begins to turn out in favor of Park," and "there is no reason for any minor shareholder to oppose Park's proposals on normalization of shareholder return, retirement of treasury shares, rationalization of directors' fees, and securing independence of the board of directors." Furthermore, the report added, "It will work in favor of the shareholders to take Park's proposal into consideration and avoid company-biased perspective on this issue", with a remark that the global proxy advisor ISS' recommendation is disappointing.

Park said, "I would like to express my deepest gratitude for the wide support from our fellow shareholders and stakeholders with regards to my proposal aimed at transforming Kumho Petrochemical", and "I will carry on my transparent communication activities with all our fellow shareholders and stakeholders to strive for enhancing the company's long-term corporate value."

NBIM's Vote on Kumho Petrochemical Annual General Meeting of Shareholders Agenda
*Highlighted agendas are the ones proposed by shareholder, Chul Whan Park

CGCG's Voting Recommendations on Kumho Petrochemical Annual General Meeting of Shareholders Agenda
*Highlighted agendas are the ones proposed by shareholder, Chul Whan Park