Industry anticipates fierce management disputes ahead of next month's shareholder meetings.
As the season for regular shareholder meetings of December closing companies approaches, the battle for control between competing companies is intensifying. In particular, disputes over corporate control among publicly listed companies are increasing, and the nature of these conflicts is becoming more intense. In addition to the ongoing management dispute between Korea Zinc and Youngpoong, which marks the end of a decades-long partnership, some companies are expected to engage in even fiercer shareholder battles over management control, with key business decisions likely to be contested. According to industry sources on the 5th, the most attention-grabbing corporate control battle during this year’s shareholder meeting season is between Korea Zinc and its competitors. The management struggle for the world’s top non-ferrous metals company has been full of twists, with Chairman Choi Yun-beom of Korea Zinc facing off against Youngpoong and MBK in an ongoing conflict. The movements of Daemyung Sonogroup and Yerimdang regarding the management rights of T’way Air are also noteworthy. Daemyung Sonogroup became the second-largest shareholder of T’way Air by purchasing shares held by JKL Partners since July last year. The gap in shareholding with the largest shareholder, Yerimdang, is only 3.3 percentage points. In 2025, Daemyung Sonogroup is expected to intensify its efforts to secure management control, increasing pressure significantly. As the management dispute between the siblings of Ourhome, the second-largest foodservice company in South Korea, intensifies, Kim Dong-sun, the third son of the Hanwha Group, and the vice president of Hanwha Galleria and Hanwha Hotels & Resorts, has entered the race to acquire management control. Hanwha, which sold its foodservice and food ingredients division, Foodist, to a private equity fund in 2020, is re-entering the foodservice market because it is considered a lucrative industry. The significant increase in management disputes is due to several factors, including the dilution of ownership stakes after the second-generation leadership, the growing presence of private equity funds, the rise in individual shareholders, and the increase in activist funds. In terms of actual shareholding, the Youngpoong-MBK alliance holds 40.97%, while Chairman Choi's side, including friendly shares, holds 34.35%, giving the Youngpoong-MBK alliance a higher stake. The fundamental issue is that the ownership stake of the controlling owner is weak, which means that whenever the "partnership spirit" is shaken, disputes can arise at any time. The situation is further complicated as private equity funds with significant capital have entered the management control dispute, shifting the dynamics. In South Korea, as ownership control has shifted from family-owned management to private equity funds, companies have faced confusion not only over their management philosophy but also over their identity. Private equity funds typically operate on a 5-year investment cycle, aiming to return profits and invested capital to their investors. As a result, they tend to focus on short-term profit expansion through workforce restructuring and asset sales. MBK promised in 2023 that it would "hold ING Life for over 10 years to stabilize employment" after acquiring the company. However, less than a year later, MBK carried out large-scale workforce reductions and sold the company after making a 2 trillion KRW profit in just five years. Similarly, when MBK acquired Homeplus in 2015, it had promised to invest 1 trillion KRW, but instead carried out store closures and workforce restructuring. Some companies have experienced the "curse of victory" after going through management disputes. In the competition for the acquisition of SM Entertainment in 2023, Kakao emerged victorious over HYBE. However, Kakao suffered significant damage during the process, including the arrest and indictment of founder Kim Beom-su. In the case of Korea & Company (Hankook Tire), which underwent a sibling management dispute last year with MBK's involvement, investors also faced losses. The stock price, which had typically ranged around 13,000 to 14,000 KRW, soared to around 22,000 KRW, but after a failed public tender offer, the price dropped back to around 15,000 KRW. It is reported that individual investors incurred substantial losses during this time. Hanjin Group also went through a management dispute, but the current management ultimately triumphed. However, during the dispute process, important decisions, such as future investments, were delayed, leading to growing pains for the company. ChatGPT를 사용하여 번역한 기사입니다.
