Presentation

on

Corporate Governance

December 14, 2001KO

RE

A E

QU

ITY

John J. Lee

Managing Director

Scudder Korea Fund 2

Scudder’s View on Valuing Korean Companies

Management Quality Corporate Governance

Management Integrity

Business Capability

Financial Strength

Industry

Korea Fund, established in 1984, considers management’s quality as the most importantfactor investing in Korean companies.

Scudder Korea Fund 3

Korea Fund Proves the Importance of Corporate GovernanceTotal Returns as of October 31,2001

NAV(Average Annual)

KOSPI in US Dollar (Average

Annual)

Quarter 2.38% -0.11%

1 Year 0.40% -7.90%3 Year 26.42% 10.86%5 Year -1.06% -14.64%

10 Year 4.63% -7.69%

Scudder Korea Fund 4

Performance Comparison Between Foreign & Domestic Managers As of

October 31, 2001

103.3

76.92

102.07

12.95

39.63

-35.29

47.43

33.4

45.45

-50

-30

-10

10

30

50

70

90

110

130

150

Source: HSBC

Scudder Korea Fund 5

Scudder’s Observation on Korea’s Corporate Governance

1984 - 1990 No Concept on Corporate Governance No Understanding on Shareholders

Rights Directors Don’t Understand Their

Responsibilities Shareholders Not Aware of Rights Most of Shareholders Day Traders Stock Market was Not a Major Source

of Capital Needs Unreliable Accounting & Independent

Auditors

Scudder Korea Fund 6

Scudder’s Observation on Korea’s Corporate Governance

1991 - 1997 Poor Corporate Governance Especially

by Chaebols Led to Economic Crisis

Hostile Attitude Towards Foreign

Investors

Arrogant Management Frustrated

Institutional Investors

Lack of Legal Infrastructure

Unreliable Accounting and Independent

Auditors

Scudder Korea Fund 7

Scudder’s Observation on Korea’s Corporate Governance

1998 - Present Government’s Accomplishments

More Attention on Corporate Governance Foreign Capital is Welcomed Legal Framework to Enhance Shareholders’

Right Reform on Chaebol

PSPD’s Role has Become Critical to Reform on Korea

Much Improved Quality of Accounting & Independent Audit

Improved Public Awareness Improved Management Attitude

Scudder Korea Fund 8

What’s Next

Class Action by Minority Shareholders Should

be Allowed

Enhancing Shareholders’ Legal Rights Not

Enough

Education & Training Regulators and Law

Professionals

Severe Punishments For Managements’

Wrong Doings

On-Going Education of Outside Directors

Scudder Korea Fund 9

What’s Next Con’t

Institutional Investors Should Be More

Involved

More Local Presence of Foreign Asset

Managers

Good Corporate Governance is Critical to

Korea’s

Long-Term Economic Prosperity

Western Style Transparent Mutual Funds

Needed

Scudder Launches Corporate Governance

Fund

Scudder Korea Fund 10

Cross-Border Valuation Comparison for Korea’s Top Market Capitalization stocks

Company Market Cap.

(W bn)

Discount (%)

October, 01

Method

Samsung Electronics

40,026 40%-50% Sum of Part Analysis

SK Telecom 25,319 22% Relative to Global Average on EV/EBITDA

Korea Telecom

16,546 34% Relative to Global Average on EV/EBITDA

KEPCO 15,074 50% Relative to NJA Average on EV/EBITDA

POSCO 10,996 33% Relative to Global Average on EV/EBITDA

Kookmin Bank

14,894 68%-72% Relative to regional peers by all traditional measures, including P/E, P/B vs. ROE

Source: CSFB

Scudder Korea Fund 11

Historical Stock Market Trends August 1984 - October 2001

0

200

400

600

800

1,000

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

KOSPI in Won