[비즈한국] Boseong Group, famous for its housing brand "Hanyang Sujain," is currently led by founder and Chairman Lee Ki-seung (73). With attention focused on the succession of the group to the second generation, it has been noted that the eldest son, Lee Hyun-seop, a director at Pine Industry, does not hold shares in the holding company, Boseong. Conversely, given the structure where second-generation family members control various affiliates, analysts suggest these affiliates may be utilized for succession in the future.
Founder and Chairman Lee Ki-seung sits at the very top of the governance structure. Looking at the ownership structure of the unlisted holding company, Boseong, 32.37% is held as treasury stock, while Chairman Lee Ki-seung holds 35.95% and his wife, Lee Hwa-young, holds 19.13%. Chairman Lee also holds an 8.1% stake in major affiliate Hanyang, of which the holding company Boseong is the largest shareholder with an 86.1% stake.
Chairman Lee has one son and three daughters: eldest daughter Lee Joo-hyun, second daughter Lee Bo-hyun (Managing Director at BS Industry), third daughter Lee Nae-hyun (Manager at Boseong), and eldest son Lee Hyun-seop (former CEO of BS Industry). It appears that no succession process has begun yet, as none of the four children hold shares in Boseong. The company in which the second generation holds over 90% of the stake is BS Industry (formerly Boseong Industry). BS Industry holds a 4.19% stake in Boseong.
Consequently, the business world is focusing on how the second generation of the Boseong Group owner family will secure control. A BizHankook investigation found that because there are multiple companies controlled by the second generation other than BS Industry, the possibility that they will be used for succession later is high.
Led by former CEO Lee Hyun-seop, the second-generation members have been independently building affiliates through entities such as Korea D&I, Korea Trust, Pine Industry, and Bomun Development. Except for Korea Trust, the other three companies are currently investing in special purpose vehicles (PFVs) for real estate development projects, such as BS I-City PFV, Eco Delta BS PFV, and The Pine Korea Central Gaebong.
First, Korea D&I is majority-owned by former CEO Lee Hyun-seop with a 70% stake, while his wife, Jung Ji-won, holds 15%, and three members of the third generation each hold 5%. It is the only company where the third generation holds a stake. Established in June 2020 with a capital of 2.26 billion KRW, it had total equity of approximately 13.6 billion KRW as of last year. Korea D&I holds a 19% stake each in BS I-City PFV and Eco Delta BS PFV, and also holds an 18% stake in those PFVs through its affiliate, La Defense. Furthermore, it appears they are actively expanding their business, having established The Pine Korea Central Gaebong in January this year.
Established in 2012 with a capital of 600 million KRW, Pine Industry is 40% owned by former CEO Lee Hyun-seop, with Chairman Lee's three daughters (Lee Joo-hyun, Director Lee Bo-hyun, and Manager Lee Nae-hyun) each holding 20%. As of last year, the capital was approximately 13.8 billion KRW, and former CEO Lee Hyun-seop serves as the representative of Pine Industry. Pine Industry holds a 19% stake each in BS I-City PFV and Eco Delta BS PFV.
Bomun Development, established in 2016 with a capital of 668 million KRW, has an ownership structure where former CEO Lee Hyun-seop holds 50%, Lee Joo-hyun 15%, Director Lee Bo-hyun 20%, and Manager Lee Nae-hyun 15%. Its total equity as of last year was 34.8 billion KRW. It recorded sales of approximately 140 billion KRW in 2022 due to sales revenue, but it is reported that it has not conducted any significant business since last year.
Former CEO Lee Hyun-seop is also confirmed to control Korea Trust, which engages in the real estate trust business. As of 2018, he is listed as the largest shareholder with a 38.34% stake. Korea Trust holds about a 5% stake in BS I-City PFV and Eco Delta BS PFV, and its total equity was approximately 208.7 billion KRW as of last year.
Boseong Group’s core business is real estate development, and the companies controlled by the second generation share a similar business structure, focusing heavily on real estate. Since the second generation does not directly hold shares in the holding company Boseong, industry experts predict that they are likely to increase the revenue scale of these companies and subsequently secure control through measures such as future mergers.
Regarding management succession, Boseong Group provided a brief statement saying, "We have nothing else to say beyond what has been publicly disclosed."