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| POSCO Center in Seoul / Courtesy of POSCO |
By Park Jae-hyuk
The National Tax Service (NTS) has decided to conduct a regular tax audit of POSCO Holdings later this month, causing speculation that it could prompt POSCO Group Chairman Choi Jeong-woo to step down voluntarily before he finishes his term in March next year, according to industry officials, Thursday.
POSCO Group dismissed the speculation, saying this is a routine tax audit carried out by the tax agency once every four to five years. The steelmaking group underwent its previous tax audit in 2018.
The POSCO Group chairman, who was appointed under the Moon Jae-in administration, however, has faced intensifying pressure under the presidency of Yoon Suk Yeol.
The president said earlier this year that "stewardship" is needed at companies with a multiple ownership structure that were privatized after being operated in the past as state-run enterprises. In the capital market, stewardship refers to the interference of institutional investors in the management of the companies they invest in.
KT, one of the companies with a multiple ownership structure, has already been forced to replace its incumbent CEO, Ky Hyeon-mo. He gave up seeking another three-year term, following a severe backlash from the telecommunication firm's largest shareholder, the National Pension Service, as well as from the ruling People Power Party (PPP).
Korea's leading banking groups have also replaced their respective chairmen, as the president urged them to pursue "transparent governance structures."
Against this backdrop, ruling party lawmakers have claimed that POSCO Group also should reform its corporate governance.
"The chief executives of companies with a multiple ownership structure, such as POSCO and KT, should not build their own kingdoms to keep their respective companies under their control," PPP Rep. Kim Sang-hoon said last month.
Considering the fact that Choi's predecessors stepped down in the aftermath of the transfer of political power, uncertainties have grown further about whether he will be able to complete his term.
Choi's predecessor, Kwon Oh-joon, stepped down a few months before the NTS' regular tax audit in 2018. His resignation came after President Moon took office in the aftermath of former President Park Geun-hye's impeachment.
Former POSCO Chairman Chung Joon-yang, who was appointed under the Lee Myung-bak administration, also offered to resign after President Park took office. Chung decided to step down three months after the steelmaker underwent a special tax audit in 2013.
"Even if Choi is willing to finish his term, it could be difficult for him to achieve that goal, considering the intensifying pressure from the government," an industry insider said on condition of anonymity.
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