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Hanaro chairman under pressure
SEOUL, South Korea (Reuters) -- The chairman of South Korea's second-largest Internet service provider, Hanaro Telecom Inc, faces pressure to step down over the company's performance. LG Group, which owns a 13 percent stake in Hanaro through affiliates such as Dacom Corp and LG Telecom Co Ltd, said Hanaro chairman Shin Yun-sik should take the blame for financial losses during his six-year tenure. "Hanaro Telecom is in a difficult financial state after years of financial losses during his tenure," Dacom said in a statement. Hanaro is to vote at an annual shareholder meeting on Friday on whether Shin should remain for another three years. Shin took office in 1997 when Hanaro was founded. The company has 28 percent of the broadband market in South Korea. The market leader with 47 percent is KT Corp, the country's largest fixed-line telephone operator. LG Group was also unhappy with Hanaro's failure to lure overseas investment, analysts said. Overseas investors have been less than impressed with Hanaro's competitive position in South Korea after it scrapped a takeover of smaller rival Thrunet and lost out in a bid for Powercomm Co, a cable network unit of Korea Electric Power Corp. Hanaro said it favoured its chairman staying on. It argued the company had made a profit at an operating level last year and it hoped to have its first net profit this year. "What LG Group is saying makes little sense to us," a Hanaro spokesman told Reuters by telephone. "There is no one who is more qualified to take his place." Hanaro's board of directors unanimously approved Shin's reappointment in late February. Samsung Electronics, another major shareholder with an 8.43 percent stake in Hanaro, said it was unsure which way the vote would go. Hanaro posted a net loss of 123.1 billion won ($98 million) in 2002, down from a 244.1 billion won loss the previous year. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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