Hyosung Group's late honorary chairman seeks family unity with will amid brotherly estrangement

Cho Suck-rai called for his sons to mend their ties in his will granting his estranged second son, Cho Hyun-moon, his portion of inheritance while urging the brothers to get along.

Hyosung Group executives and employees attend a funeral ceremony held for late honorary chairman Cho Suck-rai at the company’s headquarters in Mapo District, western Seoul, on April 2, following his death at the age of 89 on March 29. [YONHAP]

Hyosung Group’s late honorary chairman, Cho Suck-rai, asked for “harmony” among his three sons and allocated shares to his estranged second son, Cho Hyun-moon, in his will revealed on Wednesday.

In response to the will, the second son said through his lawyer on Thursday that he was going over its contents as “there are many unclear and unacceptable factors such as the [will’s] acquisition, form and content.” Cho Hyun-moon has been engaged in a legal challenge against the group's top management after he sued his older brother, Hyosung Chairman Cho Hyun-joon, and other executives for alleged embezzlement in 2014.

“Despite our late father’s emphasis on brotherly friendship, [my brothers] have not dropped their charges and have continued to make unfair claims in the ongoing criminal trial. Furthermore, their denying my right to serve as chief mourner to send our father off at the funeral was unacceptable and incoherent.”

Hyosung Group chairman Cho Hyun-joon, pictured left, and vice chairman Cho Hyun-sang act as chief mourners for the funeral procession for their late father, Cho Suck-rai. [NEWS1]

Cho Suck-rai wrote his will last year with a lawyer from a major law firm present, according to legal industry outlet the Law Times on Wednesday. According to the report, the will was revealed to inheritors including Cho Hyun-joon and Cho Hyun-moon after undergoing a legal review and authentication.

The document contained the late honorary chairman's call for harmony between the family and the passing of part of his fortune to Cho Hyun-moon.

“The ties between parent and child and among siblings are destined from heaven,” the will read.

“The eldest son is the eldest son; the younger son is the younger son,” Cho said, emphasizing the Confucian family norm widely practiced in conservative Korean families that prioritizes the eldest male child.

“No matter what happens, please protect the friendship between brothers,” he said, asking that the three brothers make amends.

The patriarch reportedly reserved a portion of his shares of Hyosung Group and major subsidiaries for Cho Hyun-moon.

The late honorary chairman held a 10.14 percent stake in Hyosung Corporation, 10.55 percent in Hyosung Heavy Industries, 10.32 percent in Hyosung Advanced Materials and 9.09 percent in Hyosung TNC.

According to basic inheritance law, the late honorary chairman’s widow, Song Kwang-ja, and his three sons are entitled to share that amount per a ratio of 1.5:1:1:1. In other words, Song will receive 50 percent more of the shares than each son, entitling her to 3.38 percent of Hyosung Corporation’s shares while each son will receive 2.25 percent.

Should Cho Hyun-moon receive the inheritance as outlined by the late honorary chairman’s will, he will not have a reason to file a lawsuit to claim a legal reserve of the inheritance. The legal reserve is the statutory portion of inheritance for recipients that must be given regardless of the benefactor's will, amounting to 50 percent of the inheritance share.

Financial insiders predict that Cho Hyun-moon’s inheritance of the late honorary chairman’s shares will not influence Hyosung’s management. Should the shares of the corporation be passed to the late Cho's widow and sons in accordance with inheritance laws, Hyosung Chairman Cho Hyun-joon will own 24.19 percent, Vice Chairman Cho Hyun-sang will own 23.67 percent and Cho Hyun-moon will own 2.25 percent.

Cho Suck-rai’s second son and former Hyosung Group vice president Cho Hyun-moon attends his father’s funeral altar. [NEWS1]

The second son served as Hyosung’s vice president from 2007 to 2013. He was excluded from participating in management after his lawsuit in 2014. The eldest Cho son then sued the second son in 2017 on charges of blackmail.

Cho Hyun-moon sold all of his shares in the company after being sidelined from management. The ousted businessman was even excluded from the list of the late honorary chairman’s surviving family members.

In February, Hyosung Group began the procedures to launch a holding company in July that will oversee six subsidiaries including those for industrial materials manufacturing and IT services. The new holding company, which will be led by vice chairman Cho Hyun-sang, is widely interpreted as an attempt to prevent another sibling feud over control of the group.

BY HA SU-YOUNG, KIM JU-YEON [kim.juyeon2@joongang.co.kr]