12/9/2025
Corporate Governance Forum Opposes National Growth Fund SK Hynix Plan
Chosun Biz (South Korea) (12/09/25) Eun-jung, Kim
The Korea Corporate Governance Forum has expressed opposition to the government’s plan to invest 150 trillion Korean won from the National Growth Fund into SK Hynix’s (000660) great-grandchild companies, warning that it could cause serious problems. The forum is a group formed by over 100 domestic capital market experts advocating for activist investing. In a commentary on the 9th, the forum pointed out that the government plans to ease regulations separating financial and industrial capital, limited to advanced industries, and that funds from the National Growth Fund could flow into SK Hynix under this move. The forum explained, “Under the current holding company structure, a subsidiary must fully own its great-grandchild company, but the proposed regulatory relaxation reduces the ownership requirement for great-grandchild companies to 50% and allows holding companies to hold financial leases.” It added, “This would enable large conglomerates like SK Inc. to expand their businesses by securing government equity investments and low-interest loans through multiple great-grandchild companies.” Lee Nam-woo, the forum's chairman, interpreted, “SK Hynix intends to use joint ventures or special purpose companies with 50% ownership to receive equity investments and low-interest loans from the National Growth Fund, build semiconductor facilities, and lease them back.” He suggested other large corporations could similarly expand their businesses through government equity investments and low-interest loans. The forum warned of potential corporate governance issues. Lee stated, “If SK Hynix establishes a joint great-grandchild company with government equity investment, existing shareholders will face dilution in semiconductor sales proportions, which is a serious problem.” He explained, “The market will react negatively, perceiving this as a regression in corporate governance.” The forum also noted that SK Hynix is projected to hold 100 trillion Korean won in net cash by the end of 2027, sufficient to fund investments independently. It added, “If capital is needed, SK Hynix could issue new American Depositary Receipts.” Separately, the forum expressed concerns over the government’s recent appointment of Park Hyun-joo, Mirae Asset chairman, and Seo Jung-jin, Celltrion chairman, as co-chairs of the National Growth Fund Strategy Committee. It cited Park’s avoidance of obligations and responsibilities by not serving as a registered director despite making key decisions, and Seo’s history of criticism regarding family issues and opaque management succession. Lee Nam-woo emphasized, “Equity investments from the National Growth Fund must not infringe on existing shareholders’ interests.” He argued, “Rushed implementation could undermine the effects of the Commercial Act revision and trigger capital flight from foreign investors.”
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