Tobacco maker KT&G names its COO as final CEO candidate

South Korea’s KT&G Corp., the world’s leading tobacco maker, appointed its Chief Operating Officer Bang Kyung-man as the final candidate for chief executive on Thursday. Pending approval at the general shareholders' meeting in late March, Bang is set to become the new CEO for a three-year term.

Bang has taken various roles such as chief business officer, managing director of brand management and executive managing director of strategy and planning since he joined the company in 1998. He has led the global expansion of KT&G’s major cigarette brand Esse, increasing exports of the product from 40 countries to more than 100.

He earned a bachelor’s degree in economics from Hankuk University of Foreign Studies and an MBA from the University of New Hampshire.

Bang said he will be dedicated to ensuring that KT&G leaps forward as a global top-tier company by leading innovation and seizing future growth opportunities.

Bang will focus on improving the earnings of the tobacco maker as the number of smokers is falling worldwide and Korea has frozen cigarette prices since 2015. The company’s operating profit was 1.17 trillion won ($879.7 million) last year, down 20.5% from 2016, the year after current CEO Baek Bok-in took the helm.

KT&G is also facing corporate governance issues, raised by Singapore-based Flashlight Capital Partners Pte (FCP), which owns a minority stake in the tobacco maker.

KT&G has repurchased 10.85 million treasury shares from the market through its share buyback program since 2001 and granted them to foundations and funds created and operated by its inside directors.

This has made the organization the largest shareholder with a combined 9.6% stake, compared to No. 2 shareholder Industrial Bank of Korea (IBK) with 6.93%.

In a letter sent to KT&G’s audit committee chief last month, FCP requested the tobacco maker file a lawsuit against its internal and outside directors, seeking compensation for their failure to oversee the “improper use of treasury stocks” to the detriment of shareholder interests. FCP also disagreed with the company’s selection of two internal candidates for the CEO position, including Bang.  

Write to Hun-Hyoung Ha at hhh@hankyung.com


Jihyun Kim edited this article.