[비즈한국] As Jungheung Group continues to reorganize its governance structure around second-generation Vice Chairman Jung Won-ju, it has been discovered that SM Development Industry, a company under his control, has been suffering recurring losses with zero revenue.
Jungheung Group is currently divided into Jungheung Construction, controlled by Chairman Jung Chang-sun, and Jungheung To-geon, centered around second-generation Vice Chairman Jung Won-ju. The group is accelerating efforts to reorganize its governance structure with Jungheung To-geon as the holding company. Jungheung To-geon transitioned into a general holding company last year; during the two-year grace period, it must sever the ties between Jungheung Construction and Jungheung To-geon and meet the required shareholding ratios for its subsidiaries and sub-subsidiaries.
While the current governance structure follows the path of Vice Chairman Jung Won-ju → Jungheung To-geon → affiliates, there is another affiliate in which the Vice Chairman holds a direct stake: "SM Development Industry," a company in which Jung owns a 55% share. Since its establishment in 2017, the company has never generated any revenue, drawing attention to the nature of its business.
Established in December 2017, SM Development Industry listed "apartment construction and sales" as its primary business purpose. At the time of establishment, the capital was 500 million won, with Vice Chairman Jung holding a 100% stake. Following a paid-in capital increase in 2019, the capital rose to 1 billion won, and Jung's stake decreased to 55%.
Alongside the capital increase, SM Development Industry added "trading and shipping-related business" to its corporate purpose, signaling a move to actively pursue operations. In 2020, the company began purchasing and installing approximately 10 billion won worth of ships and related equipment. Although it was expected to launch its shipping business in 2021 after completing the equipment installation, the company failed to generate any revenue and instead recorded a loss of 6.5 billion won.
It has been confirmed that SM Development Industry disposed of all related equipment just one year after starting the shipping business. Having never generated revenue since its inception, the company’s capital turned to negative 8.6 billion won, falling into complete capital impairment. The legal entity is currently being maintained with 6.7 billion won borrowed from Vice Chairman Jung. According to a Jungheung Group official, it is understood that the company is not conducting any particular business this year either.
Regarding SM Development Industry, a Jungheung Group official stated, "It is a corporation established for business diversification, but operations were suspended as the COVID-19 pandemic broke out during the preparation process. It is currently being managed as a dormant entity, and future business operations will be determined based on market conditions."