[Featured Stock] LG's Early Gains Narrow Amid 'Inheritance Dispute'

LG, which showed a strong upward trend in the early session, is experiencing high volatility as the gains narrow.

[Image source=Yonhap News]

At 9:25 a.m. on the 13th, LG was trading at 86,400 won, up 0.23% from the previous trading day. Earlier in the session, LG's stock price surged to 92,600 won, recording an increase of over 7%, but it has since reduced its gains.

The increased volatility in LG's stock price is due to the ignition of a potential management rights dispute.

According to business and legal circles, Kim Young-sik, the mother of LG Group Chairman Koo Kwang-mo, and his two younger sisters (Koo Yeon-kyung, CEO of LG Welfare Foundation, and Koo Yeon-su) have filed a lawsuit at the Seoul District Court seeking to rectify procedural issues that occurred during the inheritance process. Since the late Chairman Koo Bon-moo left no separate will, the assets worth about 2 trillion won must be redistributed according to the statutory inheritance ratios.

The industry expects that if the court rules in favor of the plaintiffs, a management rights dispute will arise during the redistribution of shares. Under current inheritance law, the spouse receives 1.5 times more than each child, and the remainder is divided equally among the children. In this case, Chairman Koo's shareholding, as LG's largest shareholder, would decrease from the current 15.95% to 9.7%. Meanwhile, Mrs. Kim's stake would increase from 4.2% to 7.95%, CEO Koo Yeon-kyung's from 2.92% to 3.42%, and Koo Yeon-su's from 0.72% to 2.72%. Combined, these three would hold 14.09%, which is twice the level of Chairman Koo's stake.