Coway (021240.KS), the home appliance rental company, has responded to a shareholder letter from Align Partners, which holds a 4% stake, rejecting several key proposals. The company notably refused the activist fund's core demand for Chairman Bang Jun-hyuk to voluntarily step down to resolve conflicts of interest between major shareholder Netmarble and minority shareholders. Attention is now focused on how Align Partners will respond at the upcoming shareholders' meeting.
According to industry sources on Wednesday, Coway stated in its recent reply that it cannot accept the proposal for Chairman Bang's voluntary non-reappointment, citing his management capabilities and track record.
Coway argued that Chairman Bang is not merely a representative of the largest shareholder's interests but serves as the executive responsible for business strategy. The company said Bang is leading four core strategies: digital transformation, innovative product launches, global expansion, and new growth engine development.
"Chairman Bang is personally overseeing future strategies including new businesses like Berex, innovative products such as the Icon water purifier, and AI adoption," a Coway official said. "As a result of this responsible management, Coway has demonstrated overwhelming growth from 2020, when Netmarble became the largest shareholder, through 2025, with compound annual growth rates of 8.6% in revenue, 11.5% in operating profit, and 10.8% in net profit."
Coway's position suggests it does not believe the company has been disadvantaged by conflicts of interest despite Chairman Bang serving as board chairman of both Coway and Netmarble. The company also indicated that formal measures such as excluding Chairman Bang from reappointment as an inside director would not be a fundamental solution to these concerns. Coway further stated that any decision on Bang's non-reappointment should be made through a shareholder vote, not simply at the request of certain shareholders.
Align Partners has been reviewing Coway's response since receiving it on the 6th. The activist fund sent a shareholder letter in December last year containing seven proposals, including: presenting long-term valuation and return on equity targets in the corporate value enhancement plan; specifying target capital structure policy; updating shareholder return policy; strengthening IR materials and shareholder communication; implementing measures to improve board independence; resolving potential conflicts of interest with the largest shareholder; and strengthening stock price-linked executive compensation.
Coway made clear it cannot accept the demand to resolve conflicts of interest with the largest shareholder, which was the central issue. Align Partners had previously stated that if Coway failed to present a meaningful position, the fund would faithfully fulfill its role as a shareholder to ensure shareholders' collective will is properly reflected. Accordingly, attention is focused on what shareholder actions Align Partners will take at Coway's shareholders' meeting scheduled for late March.
Align Partners is one of Korea's leading activist fund managers, having participated as a shareholder in companies including SM Entertainment (041510.KS) and Stick Investment (026890.KS), consistently demanding enhanced board independence and expanded shareholder returns. When demands are not accepted, the fund has called for additional improvements and taken active measures such as nominating specific individuals as auditors or outside directors through shareholder proposals. Given that Align Partners has expanded its influence by directly intervening in board composition, there is speculation the fund may intensify pressure on Coway starting from the shareholders' meeting. "Coway's response to our shareholder letter is extensive, so we are currently reviewing it," said Lee Chang-hwan, an official at Align Partners. "We plan to finalize and announce our position next week."