JB Financial wins proxy fight against activist fund Align Partners

South Korea’s JB Financial Group Co. won a proxy battle against local activist fund Align Partners Capital Management on dividends and nomination of outside directors at its general shareholders' meeting on Thursday. Market watchers speculate that key shareholders voted for the Jeonju-based banking holding company’s proposals at the meeting.

JB, the parent of Jeonbuk Bank and Kwangju Bank, filed a proposal for a dividend of 715 won ($0.55) per common stock on March 30, while Align called for a 900 won dividend per share. At the meeting, attended by the shareholders with a combined 87% of voting rights, JB’s suggestion was passed with 77% of the votes in favor.  

JB’s dividend payout ratio, yearly dividends divided by the company's net income, reached 27% and is higher than most of its market peers, said JB Chairman Kim Ki-hong at the meeting.

JB’s proposal to extend the terms of three existing outside directors was also approved with 67-81% of the votes. Align suggested Kim Ki-seok, former chief executive at Australia and New Zealand Banking Group Ltd.’s Korea office, as an independent director but was rejected with only 38% of the votes in favor.

Chemicals and food company Samyang Corp., is the largest shareholder of JB with a 14.6% stake. It is followed by Align’s 14%, OK Savings Bank’s 10.2%, National Pension Service (NPS)’s 8.2% and the US-based Capital Group Companies Inc.’s 5.11%.  

Given Align’s holdings, other key shareholders are understood to have supported JB’s proposals.

Some retail investors voiced concerns about the low valuation of JB stocks at the meeting. Before the voting, discussions on proposals between JB Chairman Kim and Align Chief Executive Lee Chang-hwan lasted more than an hour and a half.

Write to Bo-Hyung Kim at kph21c@hankyung.com

Jihyun Kim edited this article.