[비즈한국] The succession process for Harim Group, which is known to have begun in 2010, has effectively entered its final stages. 'Kyeongwoo Co., Ltd.,' a company owned by Chairman Kim Hong-kuk and his eldest son, Director Kim Jun-young of NS Shopping138250, holds shares in Harim Holdings003380. It is expected that this will have a significant impact on the succession process, but the business community is paying close attention because the company has been incurring expenses without generating any revenue for years.
Harim Group, ranked 29th in the business world, was included in the list of business groups subject to disclosure in 2016. Harim Group, which currently has 5 listed companies, 39 unlisted companies, and 31 overseas affiliates, is still nominally led by founder Chairman Kim Hong-kuk, who is the largest shareholder with a 21.1% stake. However, the succession process is practically in its final stage. Allpum, a private company owned by Chairman Kim's eldest son, Director Kim Jun-young of NS Shopping, along with Korea Biotech, holds a 22.47% stake in Harim Holdings, giving them greater control over the group than the father.
Among Harim Group's affiliates, there is a company owned by the father-son duo of Chairman Kim Hong-kuk and Director Kim Jun-young: 'Kyeongwoo Co., Ltd.' This company, in which Chairman Kim holds an 80% stake and Director Kim's private company Allpum holds a 20% stake, was established in June 1989 with capital of 50 million won. Now in its 35th year, the company's stated business purposes are quite simple, including wholesale and retail trade, food processing and trading, the Mexican Chicken franchise business, and real estate leasing.
The business report for 'Kyeongwoo Co., Ltd.' was first disclosed in 2016, the same year Harim Group was included in the list of business groups subject to disclosure. However, it was found that no revenue has been generated from 2016 to the present. It was confirmed that the company operated the Mexican Chicken franchise business until 2015, the year before the disclosure, and spun off this division (Kyeongwoo Foods) in August 2015. In December of the same year, Kyeongwoo Foods was absorbed and merged into Harim Distribution, and this April, Harim Distribution was absorbed and merged into Mexican.
'Kyeongwoo Co., Ltd.' has not generated any revenue since splitting off the Mexican Chicken franchise business, but it still contributes to Chairman Kim Hong-kuk and Director Kim Jun-young's control over the group. This is because the company holds a 1.27% stake in Harim Holdings, the holding company of Harim Group. Based on today's closing price, the value of this stake is equivalent to 7.7 billion won. While there is no revenue, it can be inferred that the company maintains its operating costs through dividend income from its Harim Holdings shares. As of last year, Kyeongwoo Co., Ltd.'s total equity stood at 10.1 billion won, indicating a solid financial structure. Meanwhile, Kyeongwoo does not hold shares in any other affiliates besides Harim Holdings.
Then, are Chairman Kim Hong-kuk and Director Kim Jun-young, who is designated as the next chairman, not intending to pursue any other business through 'Kyeongwoo Co., Ltd.' other than strengthening their control? Regarding this, Harim Group provided a brief statement to Bizhankook, saying, "As it is an investment company, there is no separate revenue."