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Shareholder activism

NPS set to up pressure on spicy Korean ramen exporter

By Nov 18, 2020 (Gmt+09:00)

The National Pension Service has signaled a possible exercise of shareholder rights against South Korea’s No. 3 instant noodle maker Samyang Foods Co., on course to post its largest-ever exports of instant noodles this year.

In a regulatory filing on Nov. 16, the $690 billion pension changed the purpose of its shareholding in Samyang Foods to “ordinary” investment from “pure” investment. That indicated NPS could stir up shareholder activism against the maker of the hit Hot Chicken Flavor Ramen, or buldak-bokkeum-myeon in Korean, ranked as the most-sold imported instant noodle during China's Nov. 1-10 shopping season.
Hot Chicken Flavor Ramen, or buldak-bokkeum-myeon
Hot Chicken Flavor Ramen, or buldak-bokkeum-myeon

The announcement came just a month after Samyang’s dishonored president Kim Jung-soo returned to the job after seven months and is seeking to reclaim a seat on the board. She stepped down in March, after the Supreme Court in January upheld her suspended two-year sentence and her husband-cum-CEO’s three-year jail sentence on embezzlement charges. She came back as president last month after getting the nod from the justice ministry.

NPS is the third-largest shareholder in Samyang Foods with a 6% stake. Unlisted Natural Samyang Co., in which Kim is the top shareholder, controls 33.26% of the ramen maker as the largest shareholder.

The country’s oldest ramen company is expected to vote on Kim's board member appointment at a general shareholder meeting next March.


The NPS move comes after it adopted a Stewardship Code in 2018 amid calls for actively exercising its rights as a major shareholder in 300-odd listed Korean companies.

Additionally, NPS and the welfare ministry, which oversees the pension fund, are drawing up news guidelines under which it will be able to intervene in the formation and operation of the boards of companies in which it has stakes, according to financial industry sources on Nov. 15. NPS Chief Executive Kim Yong-jin said at a conference last week that the pension fund will unveil the guidelines very soon.

The sources said the guidelines consist of about 10 core principles and 20 subprinciples, including barring companies from using capital restructuring and M&As as a tool to protect their top management or boards against a hostile takeover attempt; demanding the board of directors make public the chief executive’s succession plan; and calling on audit and compensation committees to be made up solely of outside directors.  

As part of shareholder activism, NPS attempted in vain to stop the chairmen of both Shinhan Financial Group and Woori Financial Group – Cho Yong-byoung and Son Tae-seung – from being named as board members in March, citing disciplinary action taken against them for improper selling of derivative-linked funds that incurred massive losses.

Last month, NPS vetoed LG Chem Ltd.’s plan to split off its battery business, but the plan won support from a majority of shareholders.


Despite top management's charges and stagnant domestic sales, Samyang Foods posted a 41% year-on-year jump in overseas sales to 99.3 billion won ($90 million) in the quarter ending in September. Exports accounted for 60% of its total sales in the third quarter, with operating profit up by 11.5% on year to 23.3 billion won.

To meet demand from overseas markets led by China and the US, the company said last month it will double its spending on domestic capacity expansion to 178.3 billion won.

By Wednesday's close, shares had lost 2.5% since Kim reassumed her leading role on Oct. 12, versus a 6% gain in the broader Kospi index during the same period.

Samyang’s Hot Chicken Flavor Ramen was the most-sold imported instant noodle on China’s online platform Jingdong during the ten-day runup to Singles’ Day Nov. 11.
Samyang’s Hot Chicken Flavor Ramen was the most-sold imported instant noodle on China’s online platform Jingdong during the ten-day runup to Singles’ Day Nov. 11.

Write to Jin-Seong Kim at

Yeonhee Kim edited this article.

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