Kumho Petrochemical, the crown jewel of South Korea’s family-run conglomerate Kumho Group, has become the center of attention as a dispute between the owner’s family members begins over control of the company.
Park Chul-wan, the company’s managing director, revealed in a regulatory filing on January 27 that he would “dissolve the joint ownership and special relationship with the existing representative reporter,” who is his uncle and chairman, Park Chan-koo.
The move is seen as a declaration that he will stand against his uncle, industry watcher said. Park Chul-wan is the largest individual shareholder, with a 10% stake.
Meanwhile, Park Chan-koo and his eldest son, Park Joon-kyung, hold 6.7% and 7.2% respectively. With his nephew’s dissolution of the joint ownership, Park Chan-koo and his specially related parties now hold a combined 14.68% stake, down from 24.68%.
The announcement did not come as a surprise to observers. “There has been speculation since last year that Park Chul-wan had started working with a law firm to fight for control of the company,” an industry insider said.
Park Chul-wan also reportedly submitted a shareholder proposal to the company last week, requesting a dividend increase and the replacement of board members.
Park Chul-wan, 42, is the only son of Park Jeong-koo, who was one of the five sons of the group’s late founder Park In-cheon and died of lung cancer in 2002. He started to work at Kumho Petrochemical in 2010, leading its synthetic rubber business.
He probably felt sidelined as many people consider his cousin, Park Joon-kyung, as the heir apparent of Kumho Petrochemical, industry watchers said. Park Joon-kyung was promoted to executive director last year, with Park Chul-wan overlooked. The company is also expected to work on a succession plan soon, as Park Chan-koo will be 72 this year.
Observers said he might have concluded that there is a chance of success if he receives support from allies. Some are linking construction company IS Dongseo’s recent purchases of shares in Kumho Petrochemical with this family feud.
IS Dongseo reportedly bought about 100 billion won ($89.4 million) worth of shares, or about a 3% stake, in the company over the last five months. (Reporting by Euna Jo)