Chairman Kim Seung-yeon Gifts 11.32% Hanwha Shares to Three Sons... Management Succession Completed (Comprehensive)

Kim Dongkwan and His Two Brothers Now Hold 42.67% Stake in Hanwha Corporation
Kim Seungyeon Resolves Succession Controversy to Focus on Core Business
Gift Tax of 221.8 Billion KRW to Be Paid in Accordance with Law and Ethical Management Principles

Kim Seung-yeon, chairman of Hanwha Group, gifted half of his 22.65% stake in Hanwha Corporation, amounting to 11.32%, to his three sons. The company explained that this move is intended to complete the management succession while also quelling controversies related to Hanwha Aerospace's paid-in capital increase.

Hanwha announced on the 31st that Chairman Kim transferred 4.86%, 3.23%, and 3.23% of his Hanwha Corporation shares to Vice Chairman Kim Dong-kwan, President Kim Dong-won, and Vice President Kim Dong-sun, respectively. After the transfer, the shareholding structure of Hanwha Corporation, the group's holding company, will be reorganized as follows: Hanwha Energy 22.16%, Chairman Kim 11.33%, Vice Chairman Kim 9.77%, President Kim 5.37%, and Vice President Kim 5.37%.

Kim Seung-yeon, Chairman of Hanwha Group. Photo by Hanwha

The three sons currently hold 100% of Hanwha Energy's shares, and with this share transfer, their combined stake in Hanwha Corporation reaches 42.67%, completing the management succession. The company stated, "Chairman Kim will continue to hold his position as chairman of Hanwha Group after the share transfer and will provide management advice and support global business based on his professional management expertise and global network."

According to Hanwha, this transfer is a measure to resolve unnecessary controversies and misunderstandings related to management succession and to focus on the core business. It is said to be a move to prevent the paid-in capital increase of Hanwha Aerospace and the acquisition of Hanwha Ocean shares from being linked to the succession. A Hanwha official said, "This is a magnanimous decision to eliminate uncertainties in the governance structure, strengthen responsible management, maximize shareholder value, and contribute to national economic development. With the completion of the succession through this share transfer, baseless speculations and distortions connecting the urgent and essential large-scale overseas investment purpose of Hanwha Aerospace's paid-in capital increase to the succession will be dispelled."

The gift tax to be paid by Vice Chairman Kim and others due to this share transfer amounts to approximately 221.8 billion KRW. The company explained that they plan to pay the taxes transparently and faithfully according to the principles of ethical management, in accordance with inheritance and gift tax laws. The tax base price will be determined based on the average stock price over two months before and after June 30, the reference date. This is in accordance with the pre-disclosure system for insider stock transactions of listed companies, and the company added that claims that the transfer was decided at a low stock price or that the stock price was intentionally lowered will not be possible.

Previously, Hanwha Corporation's stock price rose sharply after its subsidiary Hanwha Aerospace announced on the 10th of last month that it would acquire part of Hanwha Ocean's shares, reaching 52,300 KRW on the 10th. Until then, Hanwha Corporation's stock price had remained between 20,000 and 30,000 KRW for three years. Surpassing 50,000 KRW is the first time in eight years since August 2017. The closing price of Hanwha Corporation's stock on the 31st was 40,950 KRW.

A Hanwha official reiterated, "With this share transfer, we plan to resolve controversies related to succession and focus on national next-generation core businesses such as defense industry, shipbuilding and marine, and aerospace to enhance corporate value and contribute to national economic development."