Hankook & Company owner family's siblings to wage proxy battles over helm

Cho Hyun-bum and Cho Hyun-sik

The sibling feud at Hankook & Company Co. (formerly Hankook Technology Group) over the control of the South Korean tire giant that appeared to have resolved through bowing-out by the eldest would likely change the scene from a courtroom to shareholders’ conferences.

Cho Hyun-sik, vice chairman of Korea’s top tire maker Hankook & Company, and his sister Cho Hee-kyung, head of Hankook Tire Foundation, are gathering votes to their motion to seat Lee Hye-woong, CEO of BRB Korea Advisers, on the management board and the audit committee.

Hankook Tire & Technology is the flagship of the conglomerate, running eight tire factories abroad with a worldwide sales network.

The current managing board of Hankook Tire & Technology is fielding its own choice of Lee Mi-ra, chief human resources officer at GE Korea. The board is currently comprised of Cho Hyun-bum, co-CEO of Hankook & Company; Hankook Tire & Technology CEO Lee Su-il; and three outside directors.

The two candidates will be put to a vote at the general shareholders’ meeting on March 30.

Just a day earlier, Cho Hyun-sik, the first son of the tire conglomerate’s Chairman Cho Yang-rai, announced his resignation from management to concede his younger brother Cho Hyun-bum as the sole head of the firm. The younger Cho was formally picked by their father as the successor, a decision that was met with protest from the elders.

On the same day, the older brother proposed Lee Han-sang, professor at Korea University, as an outside director and a member of the audit committee at Hankook & Company, spurring speculation that Cho may want to bring Lee on board as a proxy while he gathers allies outside the firm. Cho and Lee both officially denied such an accusation.

Hankook & Company board again snubbed the elder Cho’s proposal and went on with nominating its own candidate Kim Hye-kyung, professor at Ewha Womans University, as an outside director. Since Cho Hyun-sik has not withdrawn his recommendation, shareholders of the holding company also would have to make choice at the general meeting on March 30.

The wind is in favor of the defending Cho Hyun-bum.

Hankook Tire & Technology’s major shareholders are Hankook & Company with a 30.67 percent stake; Hankook & Company chairman and the family's head Cho Yang-rai with a 5.67 percent stake; and Cho Hyun-bum with a 2.07 percent stake. Even with the local law limiting voting rights to up to 3 percent per each shareholder, the opposing party Cho Hyun-sik and Cho Hee-kyung still stand weak with a stake of 0.65 percent and 2.72 percent, respectively.

On Friday, Hankook Tire & Technology shares closed 6.2 percent lower at 47,650 won ($42.43) and Hankook & Company shares down 4.2 percent at 17,250 won.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]