Korea Electric Power Corp. (015760), the country’s monopoly electricity supplier, selected former Commerce Vice Minister Cho Hwan Eik as chief executive officer.
Cho took charge today after South Korean President Lee Myung Bak approved a shareholder vote ratifying the appointment, the Seoul-based utility said in a mobile-phone text message. Cho is the first former government official to run Kepco, as the state utility is known, in more than four years.
Cho, 62, replaced Kim Joong Kyum, who stepped down last month after failing to win government support for a big enough increase in electricity tariffs. The utility reported annual losses for four straight years through fiscal 2011, according to data compiled by Bloomberg.
“Korea’s power tariffs have remained lower than generating costs since 2008 even when consumer prices soared upon high crude oil prices,” acting CEO Cho In Kook said at the shareholder meeting today. “Kepco needs to change the tariffs to reflect costs, which will be essential to earn profits from operations, and pay dividends to shareholders.”
Shares of Kepco rose 3.2 percent to 28,650 won today in Seoul. The stock has gained 12 percent this year, lagging behind a 24 percent increase in a subindex of 11 South Korean electricity and gas companies.
Kepco selected Kim Ssang Su, former LG Electronics Inc. (066570) vice chairman, in August 2008, and Kim Joong Kyum, former Hyundai Engineering & Construction Co. president, in September 2011 to reform the utility. Cho held various state positions, including vice commerce minister during 2004 and 2006, and worked as president of state-controlled Korea Trade Promotion Corp. for three years until 2011.
Cho will make the stable supply of electricity a top priority, and then seek solutions for raising power tariffs, Korea Economic Daily reported today, citing Cho.
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