[COVER STORY] From Tiger to Align, shareholder activism takes root in Korea
When a U.S. fund began challenging SK Telecom in 1999, corporate Korea was only beginning to learn what shareholder activism looked like. The country had only recently emerged from the depths of the Asian financial crisis, and its capital markets were opening rapidly to foreign investors. Tiger Management built a 6.6 percent stake in the country's largest wireless carrier and pressed for changes,…
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In 1999, a U.S. fund initiated shareholder activism in Korea by challenging SK Telecom. At that time, Korea was still recovering from the Asian financial crisis, and its capital markets were rapidly opening up to foreign investors. Tiger Management acquired a 6.6 percent stake in SK Telecom and advocated for stronger external oversight and a larger role in the company's operations.
The Chey family, a prominent chaebol dynasty and the controlling family of SK Group, spent approximately 2 trillion won to protect their dominance in the group. Soon after, Tiger Management made a substantial profit of 630 billion won ($463.6 million) by selling its stake. This success only fueled suspicions that foreign funds were profiting at the expense of Korean companies.
Despite this, the concept of foreign investors demanding change in major Korean companies seemed novel and unsettling to many. Later, Sovereign challenged SK Corp. in 2003, Carl Icahn targeted KT&G in 2006, and Elliott continued to make waves in the Korean corporate landscape.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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