"Donation of Inherited Property to Public Interest Foundation... Hyosung Wants 100% Freedom"
Distrust of Will Continues... Suggests Possibility of Claiming Statutory Share Lawsuit
Hyosung "Sincerity Needed, Not Words... Considering Fundamental Measures for Harmony"
Former Hyosung Vice Chairman Cho Hyun-moon, the second son of the Hyosung family who left Hyosung management after conflicts with his father and elder brother, expressed hope that "from now on, we can stop fighting and each go our own way." However, it seems difficult to immediately resolve the decade-long discord between the brothers. Cho still expressed distrust regarding his late father's will, and the Hyosung Group also voiced skepticism about his sincerity. The legal dispute among the brothers is ongoing.
On the 5th, Cho held a press conference and said, "I intend to honor my late father's wishes by ending the conflict among brothers and reconciling," adding, "I will not claim any inheritance as my own and will contribute it to the establishment of a public interest foundation." He continued, "I have no interest whatsoever in Hyosung's management rights," and said, "What I want is 100% freedom from Hyosung."
Appeared Four Days After HS Hyosung Launch... Establishing Public Interest Foundation and Affiliate Separation Require Brothers' Cooperation
Former Hyosung Vice President Cho Hyun-moon is speaking at a press conference on inheritance held on the morning of the 5th at the seminar room of Sparkplus COEX branch in Gangnam-gu, Seoul. [Photo by Choi Seo-yoon]
His appearance came just four days after the launch of HS Hyosung. The Hyosung Group established the new holding company HS Hyosung, with Chairman Cho Hyun-joon and Vice Chairman Cho Hyun-sang taking charge of Hyosung Corporation and HS Hyosung, respectively. On that day, Cho said, "With Chairman Cho Hyun-joon and Vice Chairman Cho Hyun-sang proceeding with affiliate separation, I believe that the three brothers managing independently without being tied as special related parties of Hyosung Group is also my late father's will."
The establishment of the public interest foundation (Danbit Foundation) and affiliate separation mentioned by Cho require the cooperation of the brothers. When co-heirs agree and cooperate in contributing inheritance tax to the establishment of a public interest foundation, they can receive tax reduction benefits. He said, "If we receive tax reduction benefits, the amount will exceed the resources used to pay the inheritance tax," and added, "I believe the other co-heirs will also cooperate in establishing the public interest foundation."
The heirs must pay inheritance tax by September 30, six months after the passing of Honorary Chairman Cho (March 29). The total inheritance tax to be paid amounts to about 400 billion KRW, with Cho's share estimated at around 100 billion KRW. The Hyosung family brothers are expected to settle inheritance-related issues such as property division by the end of September.
As he mentioned, to achieve "100% freedom from Hyosung," it is also necessary to dispose of shares held in unlisted companies within the Hyosung Group. According to the Fair Trade Act, to separate affiliated family companies, the shareholding must be reduced to less than 3% for listed companies and less than 10% for unlisted companies. He urged his brothers, "I hope the brothers and Hyosung will cooperate in the essential share disposal for affiliate separation." Since transactions such as selling shares in unlisted companies are not easy, it implies that affiliate separation could be possible if shares are redistributed by concentrating them in the hands of those holding large stakes.
Cho holds 80% of shares in Dongryung Industrial, 20% in Hyosung Toyota, 14.13% in Hyosung TNS, and 3.48% in The Class Hyosung. He also holds 10% each in real estate holding companies Shindongjin and Trinity Asset Management. All are unlisted companies.
Still Cannot Accept the Will... "Five Minutes at Late Father's Funeral Was Not My Intention"
The second son of the Hyosung family, Cho Hyun-moon, who severed ties with his family due to the "Brotherly Conflict," is entering the seminar room at Sparkplus COEX branch in Gangnam-gu, Seoul, during a press conference held on the 5th. Photo by Jo Yong-jun jun21@
Cho did not hide his resentment toward his family. When asked if he had anything to say to his mother, he replied, "I will visit and greet my mother when I have time and opportunity," adding, "I was unable to see her when I went to the late father's funeral hall last time."
He said, "I left after five minutes of condolence, but that was not my intention," explaining, "I was told to leave against my will, so I had to leave unwillingly." He added, "There is much to say, but (today's press conference) is a place where I hold all these feelings and intend to start anew without further conflict with my brothers," and then stopped speaking.
Regarding the late Chairman Cho's will, he expressed distrust, saying, "The will, which is said to have been written by my late father, is unclear and difficult to accept in terms of how it was obtained, its form, and content." Cho said, "I have asked the executor of the will several times and received answers, but there are still unclear parts, so it is difficult to accept the contents of the will at this time."
Hyosung: "Both Relieved and Disappointed... Time Needed"
On April 2nd, Hyosung executives and employees attended the funeral ceremony of the late Jo Seok-rae, Honorary Chairman of Hyosung, held at Severance Hospital in Seodaemun-gu, Seoul. [Photo by Hyosung]
The Hyosung Group said it needs time to assess Cho's sincerity.
The group stated, "We consider it fortunate that he has expressed his intention to honor his father's will even at this point," but also said, "It is disappointing that, although three months have passed since the honorary chairman's funeral, he said he would visit his living mother when time and opportunity allow without even a word to her."
They added, "The family seems to be contemplating fundamental and practical ways to achieve peace and harmony among family members with genuine sincerity, not just words."
Separately, the brothers are engaged in legal disputes. Previously, in 2014, Cho filed complaints against Chairman Cho and key executives on charges of breach of trust and embezzlement, sparking a 'brotherly rebellion' and completely severing ties with the family. In 2017, Chairman Cho countersued, alleging that Cho threatened to hand over illegal documents to the prosecution unless his unlisted shares were bought at a high price.
Currently, Cho is on trial without detention on charges of attempted coercion. Even if Chairman Cho's side does not want Cho to be punished, the trial continues because attempted coercion is a crime punishable under criminal law regardless of the victim's wishes.
"If Cho Hyun-joon and Hyun-sang's Side Delays Without Response, I Will Have No Choice But to Take My Own Path Including All Legal Rights"
Former Hyosung Vice President Cho Hyun-moon held a press conference on the 5th at the Sparkplus COEX branch seminar room in Gangnam-gu, Seoul, to express his position regarding inheritance. Photo by Jo Yong-jun jun21@
Cho's legal representatives explained that the will's contents are unclear and accepting it could lead to future disadvantages. The law firm Barun, representing Cho, stated, "We set official deadlines twice for responses from the will's executor but received no reply."
Cho said, "If they only delay without clear answers, I will have no choice but to take my own path, including all legal rights granted to me." This is interpreted as a possibility of filing a statutory reserved portion claim lawsuit.
The late Honorary Chairman Cho Seok-rae, who passed away in March, left a will urging reconciliation among his three sons. He decided to leave Cho an inheritance exceeding the minimum statutory reserved portion. Cho's share includes 3.37% of Hyosung TNC, 1.50% of Hyosung Heavy Industries, and 1.26% of Hyosung Chemical, but the share inheritance has not yet been completed. Chairman Cho and Vice Chairman Cho have completed their share inheritance.
An industry insider said, "On the surface, Cho has made a gesture of reconciliation, but at the same time, he clearly indicated that he might take legal action if Hyosung does not cooperate," adding, "It does not seem that the conflict will be resolved anytime soon."
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