POSCO names new chairman

POSCO chairman Yoo Sang-boo, above, has stepped down and has been succeeded by Lee Ku-taek. Story Tools

SEOUL, South Korea -- Yoo Sang-boo, chairman and chief executive of the giant South Korean steelmaker POSCO Co, has bowed to investor pressure and has stepped down.

His successor is company president Lee Ku-taek, whose appointment was approved at a POSCO board meeting in Seoul Friday.

Vice-president Kang Chang-oh will take Lee's place as president.

POSCO is the world's No. 2 steelmaker, behind Luxembourg-based Arcelor.

The resignation of Yoo, who faces charges over misusing company funds, came three weeks after key investors openly opposed his reappointment.

"The chairman has decided not to seek another term after his tenure ends (at the end of this month)," a company spokesman told Reuters news agency on Thursday.

POSCO shares are 2.6 percent higher at 98,500 won in morning trade Friday, in line with the broader market's gain. The shares rose almost four percent to 96,000 won on Thursday, outperforming the broader market.

Strong opposition

Yoo had come up against strong opposition from local institutional investors backed by the government. Last month, the Industrial Bank of Korea, a state-run bank with a 2.34 percent stake in POSCO, and other state-run financial firms said they were opposed to retaining Yoo for another two-year term.

Yoo was indicted in June 2002 on charges that he forced affiliates to buy shares in lottery company Tiger Pools International (TPI) at prices above their market value.

According to the Chosun Ilbo newspaper, TPI was the company at the center of the scandal involving Kim Hong-gul, the son of former president Kim Dae-jung.

Yoo is now on trial. POSCO has denied any wrongdoing.

The new administration of President Roh Moo-hyun has pledged to clamp down on South Korea's conglomerates, known as chaebol, which are in the spotlight after a $1.2 billion accounting scandal at SK Group, the fourth-biggest business group.

POSCO was fully privatized in October 2000 and financial institutions with government shareholdings now hold a stake of about seven percent.

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