Shares in KT&G Corp surged 15 per cent to a record high on Monday as high-profile US investors teamed up to seek a corporate governance change at South Korea's biggest cigarette maker.

Billionaire investor Carl Icahn and Warren Lichtenstein, who leads investment group Steel Partners, have recommended Lichtenstein himself and two other candidates to the board at KT&G, the South Korean firm said on Monday.
Two Icahn-controlled investment funds said on Friday in a filing to the South Korean regulator they have partnered with High River Limited Partnership and Steel Partners II, L.P., representing a combined 6.59 percent stake in KT&G. The funds have bought KT&G shares since mid-2005.
Icahn's funds said in the filing the investors intended to influence KT&G's management through the ownership by having a say in issues such as possible merger, acquisition or asset sales.
KT&G said they have asked to nominate Lichtenstein, Howard Lorber and Steven Wolosky as candidates to be elected to the KT&G's board as non-standing members.
Icahn, who recently made headlines by waging a proxy battle for control of US media giant Time Warner, had urged through representatives that KT&G list its ginseng unit, sell assets and pay more dividends. Lichtenstein is also known for being a demanding investor.
KT&G has rejected the listing proposal, but analysts expect the shareholders' move to help boost KT&G's shareholder value eventually.
KT&G, valued at around US$ 9.5 billion, controls three quarters of the domestic tobacco market with brands like This, Raison and Esse in a country where one in four people smokes.
State-run Industrial Bank of Korea owns 5.9 per cent in KT&G. (pi)