ISS Recommends Full Support for SMEC Management Proposals, Opposes All SNT Shareholder Proposals

ISS Voting Recommendations for SMEC (Image: SMEC) Business Wire

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– Global proxy advisor ISS finds SMEC board nominees qualified and governance sound

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– ISS sees insufficient justification for board overhaul proposed by SNT

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SEOUL, South Korea — Institutional Shareholder Services (ISS), the world’s leading proxy advisory firm, has recommended that shareholders vote in favor of all proposals submitted by SMEC’s (KOSDAQ: 099440) management and against all shareholder proposals put forward by SNT Holdings in connection with SMEC’s upcoming annual general meeting (AGM) scheduled for March 31, 2026.

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ISS, which holds a dominant position in the global proxy advisory market and serves as a key reference for institutional investors’ voting decisions, issued its voting recommendations in a report published on March 19.

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In its analysis, ISS recommended support for all director and audit committee nominees proposed by SMEC’s board, noting that no material concerns were identified with respect to the qualifications, independence, or overall governance framework of the company. This suggests that, under ISS’s established evaluation criteria—including candidate suitability, potential conflicts of interest, governance risk, and shareholder protection—the current composition of SMEC’s board and governance structure is considered stable and sound.

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Conversely, ISS recommended voting against all director candidates nominated by SNT Holdings, citing, among other factors, the dissident’s failure to provide timely disclosure in connection with its shareholder proposals. In addition, ISS supported the re-election of audit committee members proposed by the board, finding no issues with the audit committee structure or its nominees.

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SMEC views ISS’s opposition to the SNT proposals not merely as reflecting insufficient justification, but as a clear indication that a board reshuffle led by SNT-affiliated nominees at this stage could undermine corporate value and adversely affect shareholder interest.

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The ISS report also reflects SMEC’s position that SNT Holdings has rapidly accumulated shares since June 2025 as part of what SMEC characterizes as a hostile takeover attempt, and that the election of candidates affiliated with SNT and its group companies could give rise to conflicts of interest and a prioritization of SNT Group’s control over SMEC’s independent business interests.

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Furthermore, SMEC has argued that SNT’s ultimate objective may be to secure control over the Hyundai WIA machine tools business rather than to foster SMEC’s standalone growth. According to SMEC, such a scenario could result in operational decisions that prioritize SNT’s group-level interests over SMEC’s own long-term growth trajectory, potentially impairing its future competitiveness. In response, SMEC has emphasized that it is proposing a slate of professionally qualified director candidates while advancing governance enhancements aimed at protecting shareholder value.

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In addition to board-related matters, ISS recommended approval of all key management proposals, including amendments to the articles of incorporation, reduction of capital reserves, election of audit committee members, and approval of director remuneration limits.

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With respect to the proposed amendments to the articles of incorporation, ISS noted that the changes are largely aligned with recent amendments to the Korean Commercial Act and are non-contentious in nature. ISS also positively evaluated the establishment of a remuneration committee and a nominating committee, highlighting their role in enhancing board independence, transparency, and alignment with shareholder interests.

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Overall, ISS concluded that SMEC’s proposals are consistent with shareholder value enhancement and sound governance practices, while the dissident proposals fail to present a compelling case for change at this time.

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