[La Deok-yeon Gate] No Relation to Ananti? Former Chairman Lee Joong-myung Serves as Auditor and Inside Director at Major Affiliates

Ananti Stake Indirectly Held by Jungang Tourism Development Auditor... Dongshin D&L Inside Director
Owner Family Holds Multiple Executive Positions in Affiliates... Criticism of Rooftop Family Business Management

Former Ananti Group Chairman Lee Joong-myung is under suspicion of being involved in stock price manipulation related to the Soci?t? G?n?rale (SG) Securities-induced crash, bringing renewed attention to the complex ownership structure of Ananti Group. Lee's Ananti Group is also facing allegations of illegal real estate transactions with Samsung Life Insurance and false accounting disclosures.

Lee Jung-myung, Former Chairman of Ananti Group

The Owner Family Does Not Directly Control Ananti, the Core Affiliate

Ananti Group holds multiple affiliates centered around its main listed company, Ananti. Under Ananti, there are key domestic and international affiliates such as Ananti Cove, Ananti Gangnam, Ananti Hanla, and Emerson Pacific Beijing. Notably, Ananti Cove is currently developing the 'Village de Ananti' hotel and resort project within the Osiria Tourism Complex in Gijang, Busan, through Village de Ananti PFV. Securing control over Ananti is central to the group's overall dominance.

However, the owner family, consisting of former Chairman Lee and his children, does not directly control Ananti. Currently, Jungang D&L (Ltd.) holds the largest stake in Ananti with 12.09%. The second-largest shareholder is Daemyung D&L (Ltd.) with 11.68%. Former Chairman Lee Joong-myung holds 2.34%, his eldest son Lee Man-gyu, CEO of Ananti, holds 2.98%, and his second son Lee Hong-gyu, former CFO of Ananti, holds 2.57%, each owning only around 2% stakes.

The first and second largest shareholders of Ananti, Jungang D&L and Daemyung D&L, are wholly owned by Jungang Tourism Development and Sejong Emerson, respectively. In 2009, Jungang D&L and Daemyung D&L were split into investment companies (Jungang Tourism Development and Sejong Emerson) and operating companies (Jungang D&L and Daemyung D&L), dividing the two companies that controlled Ananti into four. This created an additional layer above Ananti in the ownership structure.

The rooftop-like ownership structure of Ananti Group does not stop at Jungang Tourism Development and Sejong Emerson. Dongsin D&L and Daemyung D&L control Jungang Tourism Development, while Daerim D&L holds shares in Sejong Emerson. After the 2009 split, Jungang D&L acquired a 10% stake in Sejong Emerson, and Daemyung D&L acquired a 30% stake in Jungang Tourism Development, creating a cross-shareholding structure.

Intent to Increase Group Control with Minimal Capital

The formation of such a complex ownership structure is interpreted as the owner family's intention to maximize group control with minimal capital investment. The companies above Ananti in the ownership hierarchy?Jungang D&L, Daemyung D&L, Jungang Tourism Development, Sejong Emerson, Dongsin D&L, and Daerim D&L?mostly have capital contributions of only 50 million or 100 million KRW. As of the closing price on the 15th, Ananti's market capitalization reached 575 billion KRW.

An investment banking (IB) industry insider said, "Several corporations and limited companies that directly or indirectly control the key listed company Ananti remain unlisted, making transactions and fund movements among affiliates less transparent," adding, "Due to this complex rooftop and opaque ownership structure, Ananti Group receives low ratings from ownership structure evaluation agencies."

Jungang Tourism Development and Jungang D&L, owned by CEO Lee Man-gyu and others, own and operate the Ananti Jungang Golf Club (GC) located in Jincheon-gun, Chungcheongbuk-do. Daemyung D&L and Sejong Emerson, believed to be owned by former director Lee Hong-gyu and others, own and operate Sejong Emerson Country Club located in Jeonui-myeon, Sejong City.

Sejong Emerson CC panorama.

The Owner Family Virtually Monopolizes Key Affiliate CEO and Executive Positions

CEO Lee concurrently holds multiple positions including CEO of Ananti, CEO of Jungang D&L, inside director of Jungang Tourism Development, CEO of Ananti Club Seoul, CEO of Dongsin D&L, CEO of Ananti Cove, CEO of Ananti Gangnam, CEO of Ananti Hanla, and CEO of Emerson Pacific Beijing. He is also known to hold shares in Dongsin D&L and Jungang Tourism Development.

Former director Lee Hong-gyu stepped down from the CFO position at Ananti but still serves as CEO of Sejong Emerson and inside director of Daerim D&L. He is also believed to hold significant shares in these two companies. Former Chairman Lee, who claims no connection to Ananti, holds shares in several group affiliates and serves as auditor of Jungang Tourism Development, which indirectly holds shares in Ananti. In effect, he is the auditor of a company owned by his eldest son. He also concurrently holds inside director positions at Dongsin D&L and Daerim D&L.

An official from an ownership structure evaluation agency said, "It is estimated that the annual salaries received by former Chairman Lee and his two sons, who concurrently serve as executives of affiliates, amount to tens of billions of KRW," adding, "The owner family operates in a manner akin to a family company, monopolizing executive positions across multiple affiliates with just two or three family members."

※The recent stock price crash triggered by SG Securities has sounded an alarm for the capital market order. Readers' tips will be a great help in uncovering the truth. We welcome any reports regarding investment damage cases, suspicions of stock price manipulation and asset concealment by the Ra Deok-yeon side, insider details about the mass sell-off by major shareholders of Dow Data and Seoul Gas, or any other information (jebo1@asiae.co.kr). Asia Economy is committed to establishing a transparent capital market order.