[비즈한국] The third-generation succession of Samhwa Paint000390 is shifting toward the eldest daughter, Senior Managing Director Kim Hyun-jung. Chairman Kim Jang-yeon has one son and one daughter, and among them, only Senior Managing Director Kim is involved in the management of Samhwa Paint. The eldest son has not been listed in any of the company's affiliates. However, as Senior Managing Director Kim is considered the heir apparent, her stake in Samhwa Paint—a marginal 0.04%—has already drawn attention from the business world regarding how she will secure further shares in the future.
Samhwa Paint has its roots in Donghwa Industry, founded in 1946 by co-founders Kim Bok-kyu and Yoon Hee-joong. Now in its 78th year, Samhwa Paint has grown into a mid-sized enterprise with 18 domestic and overseas affiliates, ranking third in the paint industry after KCC002380 and Noroo Paint090350. While it once appeared that a second-generation joint management system between the two families was established, with Chairman Kim Jang-yeon (son of the late Chairman Kim Bok-kyu) and CEO Yoon Seok-young (son of the late Chairman Yoon Hee-joong) leading together, Chairman Kim began to lead the company alone following the death of the late CEO Yoon in 2008.
The process by which Chairman Kim secured management control was not smooth. In April 2013, when Samhwa Paint issued bonds with warrants (BW), Chairman Kim purchased warrants worth 10 billion KRW. The family of the late CEO Yoon opposed this, filing a lawsuit to nullify the BW issuance. The dispute lasted for three years and concluded in December 2015 when the Supreme Court ruled in favor of Chairman Kim. Ultimately, the influence of the Yoon family was significantly reduced, and Chairman Kim’s control was greatly strengthened.
With nearly 10 years having passed since the management dispute ended, Samhwa Paint has reached the point of starting the third-generation succession process. Chairman Kim has one son and one daughter (Jung-sik and Hyun-jung), and of the two, only the eldest daughter, Senior Managing Director Kim Hyun-jung (39), is involved in Samhwa Paint's management. Known to hold certifications as a certified public accountant and lawyer, she began her formal management training in December 2018 as the head of the management division at Inno F&C, a paint wholesale affiliate of Samhwa Paint. At the same time, when Chairman Kim stepped down as CEO to become Chairman, the industry naturally viewed it as a move toward a management succession.
In the meantime, Senior Managing Director Kim has seen a meteoric rise. Eight months after joining as the head of the management division at Inno F&C, she was promoted to managing director at Samhwa Paint, and again to senior managing director in December 2022, just two years and four months later. Currently, she is in charge of the management support division at Samhwa Paint. As she expands her management footprint, the fact that her younger brother, Kim Jung-sik, has not been listed in any affiliates has led to speculation that he may have no interest in management.
It is widely expected that she will succeed to the management position. However, her current stake in Samhwa Paint is only 0.04% (10,000 shares), making the question of how she will secure more shares a point of interest. It is confirmed that she acquired this stake through open-market purchases in 2019, but there have been no further purchases in the five years since. Therefore, there is speculation that Chairman Kim may eventually gift or bequeath his stake (25.76%, approximately 7 million shares).
Industry observers predict that Senior Managing Director Kim will utilize Inno F&C, the company she joined in 2018 for management training, for the succession. As she is the largest shareholder of Inno F&C with a 31% stake, it is highly likely that she will either increase the company's value by growing its scale or use dividend income to raise funds for the succession.
In addition to Senior Managing Director Kim, the other shareholders of Inno F&C are her younger brother, Kim Jung-sik, and two others (60%), and Samhwa Paint (9%). Although Inno F&C does not disclose its audit reports, making its exact revenue difficult to determine, its sales from internal transactions with Samhwa Paint were 16.5 billion KRW in 2021, 13.7 billion KRW in 2022, and 13 billion KRW in 2023. According to data on Samhwa Paint's investments in other corporations, Inno F&C’s assets amount to 11.4 billion KRW.
Regarding the succession of Senior Managing Director Kim Hyun-jung, Samhwa Paint stated, "There is currently nothing specific underway regarding succession or related matters."