[Asia Economy Reporter Kiho Sung] With Cho Hyun-beom, President of Hankook Tire & Technology, rising to CEO of Hankook Technology Group, he has begun solidifying his succession to management rights. However, Cho still faces numerous unresolved issues, including management conflicts and mutual disputes.
According to industry sources on the 29th, Hankook Technology Group held a board meeting on the 26th and changed from a sole representative system under Vice Chairman Cho Hyun-sik to a dual representative system with Cho Hyun-sik and Cho Hyun-beom each serving as representatives. Although Cho resigned as CEO of Hankook Tire & Technology ahead of the appellate trial in June this year, he retained his position as president, registered director, and also COO (Chief Operating Officer) of Hankook Technology Group. On the 20th, he avoided imprisonment by receiving a 3-year prison sentence with a 4-year probation in the appellate trial and returned as CEO of the holding company.
Earlier, Chairman Cho Yang-rae of Hankook Technology Group sold all his 23.59% stake to his second son, Cho Hyun-beom, through an off-hours block trade in June. As a result, Cho’s stake in Hankook Technology Group increased from 19.31% to 42.90%, making him the largest shareholder.
However, other siblings opposed Chairman Cho’s decision. Cho Hee-kyung, eldest daughter of Chairman Cho Yang-rae and director of the Hankook Tire Sharing Foundation, filed a petition for the commencement of adult guardianship in July, citing suspicious circumstances surrounding the stock sale process.
Furthermore, last month, Vice Chairman Cho also submitted a statement as a participant, expanding the management dispute into a conflict between Cho Hyun-beom and his other siblings. Vice Chairman Cho is scheduled for a court interview on the 29th of next month.
Nonetheless, even when combining the shares of the three siblings excluding Cho Hyun-beom, their total stake amounts to only 30.97%, which is more than 10% less than Cho Hyun-beom’s stake.
Cho Hyun-beom’s immediate challenge is how to conclude the ongoing adult guardianship trial. For this reason, the industry views Cho’s earlier-than-expected rise to CEO of Hankook Technology Group and his active management role as closely related to this situation.
The naming dispute of Hankook Technology Group is also a key issue. Cho led the effort to change the name of the former holding company of Hankook Tire Group, Hankook Tire Worldwide, to Hankook Technology Group.
However, after the name change, legal disputes continued due to opposition from Hankook Technology, a KOSDAQ-listed company, and ultimately resulted in a loss. Hankook Technology Group plans to change its name again at the extraordinary shareholders’ meeting scheduled for the 29th of next month.
The naming issue also provides grounds for attacks from Cho Hyun-beom’s siblings amid the management conflict. While Hankook Technology Group is proceeding with the name change due to legal disputes, it plans to continue the legal battle.
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