Chairman Cho Yang-rae to Attend Limited Guardianship Hearing This Week... Second Son Cho Hyun-beom Absent

[Asia Economy Reporter Ki-min Lee] As the limited guardianship hearing for Cho Yang-rae, chairman of Hankook & Company, is scheduled for this week, the 'brothers' war' among the children of the Hankook Tire family over management rights appears to be heading into its second round.

According to the court and industry sources on the 18th, the Seoul Family Court will hold a limited guardianship commencement hearing for Chairman Cho on the 21st. Limited guardianship is part of the adult guardianship system, where a person with mental limitations and insufficient capacity to handle affairs can have a guardian appointed by the court upon request by themselves, their spouse, or relatives within the fourth degree. However, unlike full adult guardianship, which is initiated when the capacity to handle affairs is deemed 'continuously lacking' due to mental limitations and allows the guardian to exercise most of the ward's rights, the authority of a limited guardianship guardian is restricted to the scope defined by the court.

The court is also expected to conduct an examination of Chairman Cho as the ward on the same day. Although Chairman Cho has submitted a letter of absence and is not required to attend the court, it is anticipated that he will appear. Since his eldest daughter, Cho Hee-kyung, director of the Hankook Tire Nanum Foundation, filed for limited guardianship last July, Chairman Cho has reportedly been commuting daily to the Hankook & Company headquarters in Seongnam, Gyeonggi Province. An industry insider said, "If Chairman Cho does not attend, the court may question his health condition," adding, "Since that would hinder his ability to defend himself, it is highly likely he will appear in court personally."

After the court hearing, Chairman Cho will undergo a physical examination at one of the institutions affiliated with the Seoul Family Court: Seoul National University Hospital, the National Center for Mental Health, or Asan Medical Center.

However, it is expected that there will be no dispute among the children regarding Chairman Cho's health condition. This is because Cho Hyun-bum, the second son and CEO of Hankook & Company, who opposes the limited guardianship petition, has submitted a letter of absence for this hearing. Cho submitted the letter on the 16th. The attendance of the petitioner Cho Hee-kyung, the eldest son and vice chairman Cho Hyun-sik, and the second daughter Cho Hee-won, who are participants in the lawsuit, has not been disclosed.

The management rights dispute among the siblings intensified after Chairman Cho sold all his shares in Hankook & Company to his second son, Cho, last July. Previously, Chairman Cho transferred 23.59% of his shares to his second son through an off-hours block trade, increasing Cho's stake in Hankook & Company to 42.90%.

Following this, Director Cho stated, "An objective judgment is necessary to determine whether the decision was made voluntarily and with a sound mind," and filed for limited guardianship of Chairman Cho.

In the first round of the management rights dispute, the shareholder meetings of Hankook & Company and Hankook Tire & Technology resulted in a virtual tie between Vice Chairman Cho and CEO Cho. At last month's Hankook & Company shareholder meeting, the appointment of Professor Lee Han-sang of Korea University, recommended by Vice Chairman Cho's side, was approved. Conversely, at the Hankook Tire & Technology shareholder meeting, Im Mira, head of human resources for General Electric (GE) Korea, recommended by CEO Cho's side, was appointed.

Vice Chairman Cho, who had agreed to step down as CEO of Hankook & Company on the condition of appointing Professor Lee as an outside auditor, resigned from the CEO position on the 12th. However, since the limited guardianship hearing is ongoing and Vice Chairman Cho still holds the vice chairman position, the dispute remains unresolved.