Letter to the Board of Directors and the Management of Meritz Financial Group<\/p>\n\n\n\n
December 2, 2022<\/p>\n\n\n\n
To: The Board of Directors and the Management of Meritz Financial Group<\/p>\n\n\n\n
Dalton Investments (\u201cDalton\u201d or \u201cwe\u201d), a US-based, long-term value-oriented investment management firm, has been investing in Meritz Financial Group (\u201cMeritz\u201d or the \u201cCompany\u201d) for a long time through funds and client accounts that it manages.<\/p>\n\n\n\n
We highly commend the management of Meritz for its continued efforts to improve shareholder value. We believe that the recent announcement to return 50% of consolidated net income via share buybacks and dividends to shareholders demonstrates management\u2019s clear understanding of effective capital allocation. We also applaud the management\u2019s\u00a0decision to wholly own Meritz Fire & Marine and Meritz Securities, as the ownership in our opinion will improve business efficiency, reduce conflict of interests and increase Meritz\u2019s attractiveness to investors. Meritz has not only been posting stellar operating results with high return on equity for a long time but also been implementing shareholder-friendly policies and great capital allocations serving as the global standard.<\/p>\n\n\n\n
We believe that Meritz has been setting an example for the broader Korean market. In a market where management\u2019s commitment to improve shareholder value usually has been unsatisfactory, to say the least, Meritz demonstrates true commitment which inevitably has an impact on shareholder value and leads to investors building trust. It is also refreshing to hear the management\u2019s basic principle that one share is of equal value, regardless of whether the holder is a majority shareholder or a minority one. This commitment and understanding, along with management\u2019s large share ownership and share-based compensations, confirms the strong alignment of interests among management, the majority shareholder and minority shareholders. We greatly admire Meritz management\u2019s commitment to improve shareholder value for all shareholders, a rarity in Korea. We strongly hope that other management of Korean companies will take note and follow Meritz, which we believe could lead to the eventual removal of the \u201cKorea Discount.\u201d<\/p>\n\n\n\n
Please continue to set an example and make the shareholders proud. Thank you.<\/p>\n\n\n\n
Very truly yours,<\/p>\n\n\n\n
Dalton Investments<\/p>\n","protected":false},"excerpt":{"rendered":"