A Monaco-based fund which holds a stake in SK Corp threatened on Sunday to take legal action against a corruption-tainted chief executive at the company, South Korea's largest oil refiner.
The warning came after Sovereign Asset Management, which holds a 14.9 percent stake in SK Corp, was refused a special shareholders meeting to revise rules and to dismiss chairman Chey Tae-Won. SK Corp's board rejected Sovereign's call Friday.
"Sovereign will now ask the Korean courts to perform the fiduciary and stewardship responsibilities which SK Corp's directors are unwilling to undertake," Sovereign's chief executive officer James Fitter said in a statement.
Sovereign insists that shareholders should be allowed to vote on whether convicted criminals or those indicted for serious crimes should be allowed to act as directors of SK Corp.
Chey, 42, was sentenced last year to three years in prison for illicit dealings and accounting aimed at tightening his control over SK Corp and its parent SK Group, South Korea's third largest family-run conglomerate.
He was freed on bail pending an appeal and remains SK Corp chairman.
SK officials described Sovereign's application as an attempt to strengthen its position before next year's general meeting. They noted Chey was gaining support from domestic and other foreign shareholders.
Sovereign has denied seeking a hostile take-over. "Sovereign has never sought control of SK Corp sovereign's responsibility is to ensure that SK Corp's board of directors is genuinely accountable to the company's shareholders," the international fund said in the statement.
At an annual shareholders meeting in May, Sovereign pushed for a new board but it failed to win support from the company's labour unions and minority local shareholders concerned about the growing power of foreign investors.
The fund demands that SK Corp should bar anyone convicted of "a serious criminal offence" from the board.