UK-based hedge fund Palliser Capital has submitted a series of shareholder proposals to LG Chem, urging the South Korean chemicals group to take steps to improve governance, increase transparency, and enhance shareholder returns, according to a report by ChosunBiz.
Palliser, which holds more than 1% of LG Chem’s shares on a long-term basis, filed the proposals ahead of the company’s annual general meeting in March. The move follows the fund’s disclosure of its key demands in October last year.
In a shareholder letter, Palliser argued that weaknesses in governance, management transparency, and capital allocation have contributed to LG Chem’s shares trading at a discount to net asset value. The fund is calling for changes to the company’s articles of incorporation to allow advisory shareholder proposals to be formally placed on the AGM agenda, alongside regular disclosure of the NAV discount rate.
The proposals also include restructuring executive compensation to align pay with key performance indicators, including return on equity and the NAV discount rate, and introducing a lead independent director to strengthen board accountability and shareholder engagement.
Palliser additionally recommended that LG Chem reduce its 79.38% stake in battery subsidiary LG Energy Solution to 70% or below, using the proceeds to fund share buybacks and cancellations.
The hedge fund said the proposals are consistent with South Korea’s broader policy push to address the so-called “Korea discount” and normalise domestic capital markets.
