[비즈한국] It has been found that Lee Haeng-ja, Chairwoman of Koryo Design—who is the fourth daughter-in-law of the late honorary chairman Chung Ju-yung, the founder of Hyundai Group, and the widow of the late Hyundai Aluminium chairman Chung Mong-woo—has been relying on the pan-Hyundai family to sustain her company. The firm generates annual revenue between 10 billion and 30 billion KRW through transactions with groups such as HD Hyundai, Hyundai Department Store, and Hyundai Motor Group, with studies showing an astonishing dependence on these affiliated sales of nearly 100%.
Chairwoman Lee Haeng-ja’s Koryo Design… The Status of Transactions with the Pan-Hyundai Family
Chairwoman Lee Haeng-ja of Koryo Design was widowed in 1990 after the passing of her husband, Hyundai Aluminium Chairman Chung Mong-woo. Four years later, she began her career in management as an executive in charge of furniture development at Hyundai Comprehensive Wood (now Hyundai Livart079430). Leveraging her experience in the furniture industry, she established Koryo Design in February 2000 with a capital of 50 million KRW. Koryo Design is a comprehensive furniture company engaged in importing and selling Italian kitchen brands and Japanese office furniture, as well as marine furniture manufacturing.
However, Koryo Design relies heavily on the pan-Hyundai family for its revenue. Koryo Design has been disclosing its audit reports since 2013, and the trend in its revenue is shown in the chart below.
With the exception of 2020, more than 90% of its revenue has been generated from the pan-Hyundai family (HD Hyundai, Hyundai Motor Group, and Hyundai Department Store Group). Notably, it has consistently conducted transactions every year with the HD Hyundai Group, which includes HD Hyundai Heavy Industries329180, Hyundai Samho Heavy Industries, and Hyundai Mipo Dockyard. Koryo Design primarily supplies marine furniture to the HD Hyundai Group. Transaction volumes showed an upward trend at 28.3 billion KRW in 2013, 29.3 billion KRW in 2014, 30.8 billion KRW in 2015, and 26.7 billion KRW in 2016, before declining to 11.3 billion KRW in 2017, 15 billion KRW in 2018, 17.8 billion KRW in 2019, 14.3 billion KRW in 2020, 12.7 billion KRW in 2021, 9.9 billion KRW in 2022, and 10.2 billion KRW in 2023. As transactions with the HD Hyundai Group decreased, Koryo Design’s total revenue also fell.
Koryo Design supplied furniture to the Hyundai Department Store Group until 2020, and has been supplying furniture to the Hyundai Motor Group since 2021. Revenue generated from transactions with the Hyundai Motor Group has been increasing annually, from 2.8 billion KRW in 2021 to 3.8 billion KRW in 2022 and 6.5 billion KRW in 2023. In summary, Chung Mong-joon, Chairman of the Asan Foundation, has consistently supported his sister-in-law's company, and Chung Euisun, Chairman of Hyundai Motor Group, has essentially inherited the responsibility of supporting his aunt from his cousin, Chung Ji-sun, Chairman of Hyundai Department Store. Chung Il-sun, the eldest son of Chairwoman Lee and CEO of Hyundai BNG Steel004560, also spends 500 million to 1 billion KRW annually at Koryo Design for equipment expenses.
Regarding these transactions with Koryo Design, both HD Hyundai and Hyundai Motor conveyed similar positions to Bizhankook. An official from HD Hyundai Group stated, "For the sake of supply stability, we source marine furniture from multiple companies and select them fairly through competitive bidding." An official from Hyundai Motor Group also stated, "We understand that Koryo Design acts as a repair agent for consumer furniture. They are just one of many partners, the scale is not significant, and they were selected fairly through competitive bidding."
Changes in Ownership Structure and Financial Impairment
Chairwoman Lee Haeng-ja held a 100% stake in Koryo Design until 2022. Then, in August 2022, Trinion America, Inc. participated in a capital increase and acquired a 48.79% stake. Koryo Design's current capital is 615.08 million KRW. Trinion America is 100% owned by Chung Moon-sun, Vice President of Hyundai BNG Steel and second son of Chairwoman Lee, and is known as a company operating a third-party logistics business in the U.S. for Hyundai Translead, the U.S. commercial vehicle manufacturing subsidiary of Hyundai Motor. Therefore, it is fair to view Koryo Design as a family-owned company belonging to Chairwoman Lee and her son, Vice President Chung Moon-sun.
Despite full-scale support from the pan-Hyundai family, Koryo Design's management continues to deteriorate. Looking at the company's revenue over the last three years, it recorded 17 billion KRW in 2021, 15.4 billion KRW in 2022, and 17.4 billion KRW in 2023. During the same period, its net profit turned into a deficit, moving from 124 million KRW to -3.05 billion KRW and -670 million KRW. The company has been in a state of capital impairment for the past two years.
Bizhankook inquired about the high volume of transactions with the pan-Hyundai family and the recent management situation, but Koryo Design responded only by saying, "We cannot provide any comment."