Eldest Son Sides with Older Sister... Hankook Tire's Second Son vs Three Siblings Management Dispute Intensifies

Eldest Son Vice Chairman Cho Hyun-sik Decides to Join Adult Guardianship Trial Requested by Sister... Statement Made After About a Month
Questions Raised About Father Chairman Cho Yang-rae's Health
Chairman Cho's Side: "Second Son's Succession Planned Long Ago, Not a Sudden Decision. No Health Issues"

[Asia Economy Reporters Hyewon Kim, Jihui Kim] The management dispute over succession within the Korean Tire family has intensified between the "second son and the three siblings." Until now, the eldest son, Vice Chairman Cho Hyun-sik of Hankook Technology Group, who had withheld his position, has expressed his intention to participate in the adult guardianship trial procedure on the side of his eldest sister rather than his father.

On the 25th, Vice Chairman Cho issued a statement through his legal representative, the law firm One, saying, "I plan to participate in the ongoing adult guardianship trial procedure as a member of the family." This statement came about a month after Cho Hee-kyung, the eldest daughter of Cho Yang-rae, Chairman of Hankook Technology Group and Vice Chairman Cho’s sister, filed a petition for limited guardianship initiation against Chairman Cho at the Seoul Family Court on the 30th of last month.

Vice Chairman Cho raised concerns about Chairman Cho’s health condition, aligning with Director Cho’s stance. He said, "There is a strong suspicion that recent decisions (by Chairman Cho) may have been based on information different from the facts provided by those around him," adding, "The recent controversy over his health requires an objective and clear judgment based on expert opinions within legal procedures, not only for the chairman himself but also for the benefit of Hankook Technology Group, shareholders, and employees."

In other words, Vice Chairman Cho intends to legally examine whether Chairman Cho’s decision to transfer all his shares to President Cho was made voluntarily and in a healthy state. He added, "During this procedure, new decision-making should be deferred to prevent further disputes."

Until now, the industry has viewed the eldest son Vice Chairman Cho’s support as pivotal in determining the direction of the management dispute within the Korean Tire family. Accordingly, the conflict appears inevitable between the second son, President Cho Hyun-beom of Hankook Technology Group, whom Chairman Cho designated as his successor, and the other three siblings (Cho Hyun-sik, Cho Hee-kyung, and Cho Hee-won). Previously, Chairman Cho sold all his 23.59% stake in Hankook Technology Group to President Cho through a block deal (off-hours large-volume sale). President Cho now holds 42.9% of the shares, combining his existing shares with his father’s, becoming the largest shareholder.

Chairman Cho’s side insists that there is no significant health issue and that the decision to pass the succession to the second son, not the daughter or eldest son, was firmly made long ago. The day after the eldest daughter filed for the adult guardianship initiation trial, Chairman Cho immediately released a lengthy statement saying, "I enjoy playing golf weekly with friends, and on days without golf, I receive personal training and walk more than 4-5 km daily," adding, "I believe I am living very healthily for my age, and I really don’t understand why my eldest daughter is doing this." He expressed discomfort over the health rumors. Chairman Cho also drew a clear line, saying he never once considered giving management rights to his daughter, emphasizing that he had long designated President Cho as the largest shareholder and that this was not a sudden decision.

The judicial risks surrounding President Cho are a variable. He has been indicted on charges including receiving kickbacks from subcontractors and was sentenced in the first trial to three years in prison with a four-year probation and a fine of 615 million won. He has appealed and is currently undergoing a second trial. Depending on the sentencing in President Cho’s trial, the position of the "casting vote" National Pension Service, which holds 7.74% of the company’s shares, is also expected to be clarified.