'What Is Adult Guardianship'... Angry Chairman Cho Yang-rae Says "I Play Golf and Do Health Exercises Every Week, I'm Healthy"

Cho Yang-rae, Chairman of Korea Technology Group

[Asia Economy Reporter Kim Hyewon] Following Lotte Group, the sibling management dispute within the Korean Technology Group's founding family has intensified, making the adult guardianship system a hot topic in the business community.

Adult guardianship is a legal support system designed to assist adults who lack the capacity to manage affairs due to mental limitations caused by illness, disability, or old age. It replaced the previous system for those declared incompetent or quasi-incompetent and has been in effect since July 1, 2013.

Upon request by the individual, relatives, prosecutors, or others, the court confirms the mental state of the adult ward through a medical evaluation and statements from the ward, then appoints a guardian. This is essentially the appointment of a legal representative.

The appointed guardian can manage the ward's assets and exercise authority such as proxy rights and consent rights for legal acts. If the ward is unable to make decisions independently, the guardian can also make decisions regarding personal matters such as medical care, rehabilitation, and education under the authority granted by the court.

The adult guardianship system is divided into statutory guardianship and voluntary guardianship. Statutory guardianship is further subdivided into adult guardianship, limited guardianship, and specific guardianship. Adult guardianship applies when the capacity to manage affairs is continuously lacking and provides most assistance; limited guardianship applies when the capacity is insufficient and provides partial assistance; specific guardianship applies to temporary support or support for specific affairs. Voluntary guardianship refers to the individual appointing a guardian in advance in preparation for future mental decline.

The number of cases using the adult guardianship system has steadily increased. As of the end of last year, there were a total of 3,112 guardianship commencements. Specifically, there were 2,141 adult guardianships, 386 minor guardianships, 379 limited guardianships, 202 specific guardianships, and 4 voluntary guardianships.

Legal experts point out a regrettable aspect of the adult guardianship system: it is sometimes used as a tool for disputes over property division among family members and siblings. Recently, the cases of Lotte Group and Korean Technology Group have been representative examples in the business world.

In December 2015, the late Shin Kyuk-ho, the honorary chairman of Lotte Group, had his younger sister request the court to appoint an adult guardian, questioning the mental health of her 94-year-old brother at the time. The court decided to commence limited guardianship for Chairman Shin.

Jo Hyun-sik (eldest son), Jo Hyun-beom (second son)

On the 30th of last month, it was revealed that Cho Yang-rae, the 83-year-old chairman of Korean Technology Group, was subject to a petition for commencement of adult guardianship filed by his eldest daughter, Cho Hee-kyung, director of the Korea Tire Sharing Foundation. This came about a month after Chairman Cho sold all his shares to Cho Hyun-beom, president of Korean Technology Group, for 240 billion KRW, finalizing the succession structure. Director Cho stated that the petition was filed to objectively assess whether Chairman Cho was capable of making voluntary decisions in a healthy state.

Just one day later, Chairman Cho released a lengthy statement to dispel rumors about his health and to firmly support his second son, not his daughter or eldest son, regarding the succession issue.

Regarding his health, Chairman Cho said, "I enjoy playing golf with friends every week, and on days without golf, I receive personal training (P/T) and walk more than 4 to 5 kilometers daily." He emphasized, "I consider myself to be living very healthily for my age, and I really don't understand why my eldest daughter is acting this way." He added, "I truly don't understand why my beloved eldest daughter is doing this, and I want to ask her if she is really okay (health-wise)."

On the issue of group management rights, he drew a clear line, saying, "I have never once thought about giving management rights to my daughter." He continued, "Regarding financial matters, I have already gifted enough money to all my children, including my eldest daughter, so they can live comfortably. If my eldest daughter is interested in the foundation, she can use the money she has already received."

Chairman Cho also hinted that, as a father, he was aware of the signs of a management dispute among siblings in advance. He said, "To prevent further confusion over the past few months regarding the status of the largest shareholder within the family, I sold all my shares to President Cho as I had planned in advance." He added, "I had already designated President Cho as the largest shareholder, and this was not a sudden decision."

Regarding his long-standing belief in donating personal wealth back to society, he said, "I have been thinking a lot about it and am looking for ways to do so in the future," but firmly stated, "My children may offer opinions on the method, but the decision and involvement are not theirs."