According to South Korean media outlet Newssis, current and former directors of KT&G, a South Korean tobacco company, have been sued by activist fund Flashlight Capital Partners (FCP). It is alleged that their actions have resulted in the company incurring a loss of over 1 trillion Korean won (748 million US dollars).
KT&G’s position is that the contribution of treasury stocks is a legitimate procedure for the company's social contribution activities and employee welfare. Earlier, FCP sent a request to the Chairman of KT&G's Audit Committee to file a director's liability lawsuit, the contents of which are as follows. The investigation targets 21 former and current internal and external directors, including the current KT&G President, Baek Bok-in. If KT&G does not file a lawsuit against the directors within 30 days of receiving the request, FCP can initiate a shareholder representative lawsuit. FCP claims that since 2001, Baek Bok-in and other members of the board of directors have donated 10 million KT&G treasury stocks to foundations and funds, rather than increasing shareholder value through cancellation and sale, causing damage to the company. In response, KT&G stated in a statement, "In order to fulfill corporate social responsibility, the company donated a portion of treasury stocks for the improvement of public welfare and employee benefits.
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