National Pension Service disposes of KT stake

[Courtesy of KT Corp.]

South Korea’s National Pension Service (NPS), the country’s largest institutional investor, divested approximately 1 percentage point of its stake in KT Corp. in March 2024, thereby relinquishing its position as the telecommunications carrier’s largest shareholder. As a result, the country’s auto giant Hyundai Motor Group, the previous second-largest shareholder, is now the largest shareholder.

According to data from the Financial Supervisory Service on Tuesday, the NPS‘s stake in KT decreased to 7.51 percent from 8.53 percent as of March 20th, 2024.

The NPS disposed of 2,884,281 shares through on-market sales, reducing its holdings in KT from 22,262,450 shares to 19,378,169 shares.

As the NPS sold around 1 percentage point of its stake in KT, Hyundai Motor Group, the previous second-largest shareholder, became the largest shareholder with 20,345,700 shares, or 7.89 percent of the total. The third largest shareholder is Shihan Bank Co. with 5.64 percent.

Hyundai Motor Co. and Hyundai Mobis Co. acquired KT shares in 2022 by exchanging treasury shares with KT. At that time, KT and Hyundai Motor Group formed a strategic partnership in areas such as future mobility. Hyundai Motor and Hyundai Mobis currently hold a 4.75 percent stake and a 3.14 percent stake in the company, respectively.

[Graphics by Song Ji-yoon]

Although Hyundai Motor Group is now the largest shareholder, the process of changing the largest shareholder of KT requires government approval. For a telecommunications operator such as KT to change its largest shareholder, it needs approval from the Ministry of Science and ICT under Articles 10 and 18 of the Telecommunications Business Act that require an evaluation of public interest.

It now remains to be seen whether Hyundai Motor Group will become KT’s largest shareholder, as the change will occur due to the NPS’s simple stake disposal rather than a voluntary decision by the auto giant. Furthermore, if the NPS acquires additional shares for investment purposes in the future, the largest shareholder could change again.

“Since Hyundai Motor Group has become the largest shareholder involuntarily, it is necessary to closely monitor its actions,” an industry insider said.

“The current legal system requires notification before a change in the largest shareholder,” an official from the Ministry of Science and ICT said. “We plan to conduct a legal review of the current situation.”

Hyundai Motor Group plans to maintain its existing relationship with KT.

“We will continue to cooperate with KT in the fields of next-generation telecommunications infrastructure and information and communication technology (ICT) to lead the future mobility market,” a Hyundai Motor Group official said. “We currently have no plans to sell or purchase additional (KT) shares.”