[Wealth Succession] TYM① Major Shareholder Drives Under Influence Again During Probation... Succession Structure in Uncertainty

Chairman Kim Heeyong Breaks Shareholder Promise by Transferring Shares
Owner Risk Increases Amid Drug Use and Drug-Related Driving Accident...

Kim Sik, Vice Chairman of TYM, an agricultural machinery specialist company formerly known as Dongyang Moolsan, was sent to the prosecution after causing an accident while driving under the influence of drugs. Kim Sik is the second-generation heir who inherited the largest share from Kim Hee-yong, Chairman of TYM, and was mentioned as the next chairman of TYM. However, there are opinions that the recent series of drug-related incidents may affect the future succession structure.

According to the financial investment industry on the 4th, the Gangnam Police Station in Seoul sent Vice Chairman Kim to the prosecution without detention on charges of drug driving under the Road Traffic Act on the 25th of last month. According to the police, Kim is suspected of causing two traffic accidents in Gangnam-gu, Seoul, on July 27 while under the influence of psychotropic drugs.

This is not Kim Sik’s first drug-related incident. In October last year, while staying abroad, Kim was tried on charges of using drugs mixed with methamphetamine and ecstasy, as well as liquid marijuana, and was sentenced to one year in prison with a two-year probation in the second trial. Despite being under probation, he caused a drug driving accident.

Kim Sik is the second son of Kim Hee-yong, chairman of the Byeoksan Group and currently the largest shareholder of TYM. Chairman Kim Hee-yong has three children: eldest son Kim Tae-sik, former vice chairman; eldest daughter Kim So-won, executive director; and second son Kim Sik, vice chairman.

Originally, the eldest son and second son each held 6.28% and 6.26% of TYM shares, respectively, while the eldest daughter held 1.23%. However, in 2011, the eldest son sold all his shares off-market, making Kim Sik the sibling with the largest shareholding. Although the eldest son later received shares through convertible bonds and gifts, he never surpassed Kim Sik’s stake.

Crucially, in January this year, Chairman Kim Hee-yong gifted all his 9.6% shares to Kim Sik, solidifying Kim Sik’s position as the largest shareholder. Although Chairman Kim had declared at the 2023 shareholders’ meeting that he would donate all his shares to a scholarship foundation, he broke this promise and transferred them all to his second son. As of the end of the third quarter this year, the shareholding ratios are: Kim Sik 19.3%, former Vice Chairman Kim Tae-sik 4.34%, and Executive Director Kim So-won 3.1%.

Although Kim Sik holds the highest share ratio, considering the precedent set by the eldest son, it is uncertain whether he will continue to be active in frontline management.

The eldest son, former Vice Chairman Kim Tae-sik, joined the management team in 2019 as the head of the Planning and Coordination Office and the Finance Headquarters, key units of TYM. At that time, both Kim Sik and Executive Director Kim So-won were directors, with Kim Tae-sik holding a position three ranks higher.

However, in 2020, Kim Tae-sik was prosecuted for writing obscene messages about a specific woman who was not part of a group messenger chatroom, leading to his resignation from the company. Additionally, he was prosecuted for writing obscene posts about another woman on Facebook and was fined 2 million won in December last year.

Kim Sik also has a precedent. Following last year’s drug incident, he stepped down from his position as an inside director. However, although he became a non-registered executive, he was promoted from executive director to vice chairman, effectively expanding his influence. This is why Kim Sik’s future position is drawing more attention after the recent incident.

Regarding this, a TYM official stated, “There are currently no plans for personnel changes concerning Vice Chairman Kim Sik.”