Carl Icahn, the US activist shareholder laying siege to Time Warner, has urged KT&G, South Korea?s largest tobacco and ginseng group, to take radical steps to improve its share price.

The move by the billionaire US investor heralds the arrival of aggressive investor activism in Asia. KT&G, a former state monopoly with a market value of about $7.7bn and 75 per cent of the country?s tobacco market, said on Tuesday that it had met a representative of Mr Icahn at the end of last year.

?[Mr Icahn?s representative], as a shareholder, discussed general issues related to investment strategy with our investor relations officials,? KT&G told the Financial Times.

Over the past 12 months, the company?s shares have risen by more than 50 per cent, in line with the Seoul benchmark index.

But some foreign investors privately say the company is undervalued compared to international rivals, and should sell or list its fast-growing ginseng unit and dispose of its many properties.

At the time of the meeting ? which is believed to have taken place in late November or early December ? Mr Icahn had a stake of less than 5 per cent in the South Korean group. It is unclear whether he has increased or decreased his stake since then as KT&G has not completed its most recent shareholder audit. Mr Icahn?s office declined to comment on Tuesday.

His action is the most high-profile move by an activist investor in Asia. Unlike the US and Europe, most of the region?s large companies are controlled by governments or families that keep a tight grip on their business and are rarely challenged by minority shareholders. Any move by Mr Icahn against KT&G, whose products are beloved by South Koreans, could trigger a political and social backlash in a country that has repeatedly resisted foreign attempts to shake up its corporate sector.

Some 60 per cent of KT&G?s Seoul-listed shares are owned by foreign investors. On Tuesday KT&G said it had no plans to meet his representatives again and it was not considering a listing of its ginseng unit.

KT&G reported Won472bn ($480m) in 2004 net profit on sales of Won2,653bn, and its 2005 results are due out next week.

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