Transparency & Fairness: Flashlight Capital Demands Overhaul on KT&G CEO Nomination

Letter to Shareholders (Video) Available at (

SINGAPORE--()--Flashlight Capital Partners Pte. Ltd (“Flashlight Capital”), a shareholder of KT&G Corporation (KRX: 033780) (“KT&G” or the “Company”), released, on its YouTube channel, a video for KT&G shareholders about the CEO election on the upcoming AGM on Mar 2024. Flashlight Capital had sent a letter to the KT&G Board of Directors (the “Board”) on December 1, urging a fair and transparent CEO nomination process.

In its letter and video, Flashlight Capital pointed out various concerns regarding the previous CEO nominations. It specifically highlighted the unfair process that made resulted in the current CEO the only candidate, and criticized the Board’s remarkably swift 11-day decision-making.

Flashlight Capital expressed disappointment in the performance of the current CEO, Mr. Baek, who has held the position for three consecutive terms. Over nine years, KT&G stock fell by 19% while the KOSPI index rose by 26%. Flashlight Capital questioned the management's “vain pursuit on volume” at the expense of profit, noting a 40% revenue growth coupled with a 17% decrease in operating profit. FCP pointed to such “lack of profit motive” as a primary cause for the stock’s over 50% discount relative to its peers.

Sanghyun Lee, Managing Partner of Flashlight Capital, proposed three principles for a revamped nomination process:

  1. Sufficient Evaluation Period
  2. Include Outsiders with Global Consumer Sector (FMCG) Expertise
  3. Thorough Documentation for Transparency

Mr. Lee remarked, “The 11-day CEO nomination is unprecedented in Korea, standing out even among other former government-owned companies. KT spent four months and Posco two months on their respective processes.”

Emphasizing the importance of merit-based evaluation, Mr. Lee drew attention to the historical restriction of qualifications to "former and current executives at KT&G and its affiliates." He pointedly stated, "In Korea, suggesting that current executive challenge their top boss and apply for the CEO position is a joke. It is a long way of saying DON’T." Mr. Lee criticized that “the Board closed doors to ALL potential contenders and bent over backward to nominate Baek.” In comparison, KT, another former government-owned company, spent four months in CEO search, welcomed suggestions from shareholders, and brought in a new CEO from LG.

Regarding the request for comprehensive documentation, Mr. Lee stated, "The evaluation must be conducted with utmost confidentiality. What we seek is documentation preserved for future scrutiny. When inquiring about how the Board decided on Mr. Baek as the sole candidate in 2021, all we received from KT&G was a handwritten note that read ‘we met, we discussed, we decided.’ It wasn’t very convincing."

Flashlight Capital's video to shareholders can be accessed on Flashlight Capital’s YouTube channel (

About Flashlight Capital

Flashlight Capital Partners Pte. Ltd is an investment management firm founded by the Carlyle Group’s former Head of Korea, Sanghyun Lee. Flashlight Capital is dedicated to strengthening corporate governance and enacting transformative change to its portfolio companies. For more information about Flashlight Capital, please visit


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