[비즈한국] Now that the dispute over the management rights of Korea Zinc010130 has concluded with a victory for Chairman Choi Yun-beom’s side, attention is turning to the potential ripple effects on Young Poong000670 Group and its founding family. Chang Hyung-jin (79), an advisor to Young Poong Group, stepped back from the front lines of management in March 2015 when he resigned as a registered director of Young Poong Corp. For the past 10 years, the founding family has not participated in the management of Young Poong Corp. Although Chang's children work at Young Poong Group affiliates, they are not involved in the key entity, Young Poong Corp. Thus, ownership and management at Young Poong Corp are currently separated.
Even with ownership and management separated, the existence of a largest shareholder remains significant, as professional managers are appointed according to their wishes. A corporate insider stated, "Even if ownership and management are separated on the surface, it is difficult to go against the will of the largest shareholder on major management issues," adding, "From the perspective of the largest shareholder, if a professional manager does not listen, they can simply be dismissed."
Advisor Chang Hyung-jin has two sons and one daughter: eldest son Chang Se-joon (51), Vice Chairman of Korea Circuit007810; second son Chang Se-hwan (45), Vice Chairman of Young Poong E&E; and eldest daughter Chang Hye-sun (44). The two sons are working at Young Poong Group affiliates but are not registered directors of Young Poong Corp. The group position of Chairman, which oversees the entire organization, is also vacant. While Advisor Chang Hyung-jin previously served as Chairman of Young Poong Group, he stepped down from the role upon becoming an advisor in 2018.
The business world expected that one of the two sons would eventually become the next chairman. However, seven years after Chang stepped down, there have been no moves to appoint a successor. During the recent Korea Zinc management dispute, the two sons did not have a strong presence. Instead, it was Advisor Chang who made his presence felt by directly engaging in media interviews.
However, the inheritance of shares to the sons is complete. Even without holding the title of Chairman, maintaining the status of the largest shareholder of Young Poong Corp allows one to exert influence over the entire group. Young Poong Corp holds major affiliates such as Korea Circuit and Young Poong Electronics as subsidiaries.
Eldest son Vice Chairman Chang Se-joon holds a 16.93% stake in Young Poong Corp, while second son Vice Chairman Chang Se-hwan holds 11.86%. However, Vice Chairman Chang Se-joon does not have a clear lead in shares, as Young Poong Development and CK hold 15.56% and 6.46% stakes in Young Poong Corp, respectively.
CK is the largest shareholder of Young Poong Bookstore Holdings, and Young Poong Bookstore Holdings is the largest shareholder of Young Poong Development. In essence, the voting rights of Young Poong Development also depend on CK. The CEO of CK is Advisor Chang Hyung-jin. Therefore, the voting rights of CK are in the hands of Advisor Chang.
In the legal community, the question of whether management rights could be exercised based on the opinion of a single CEO was once a subject of debate. During the management dispute of Hanmi Pharm128940 Group last December, the court ruled that it was possible to exercise voting rights regarding Hanmi Science's stake in Hanmi Pharm based on the opinion of a single person, CEO Lim Jong-hoon of Hanmi Science008930. In this light, there is no issue with Advisor Chang Hyung-jin exercising CK's voting rights.
Advisor Chang has never publicly supported either of his two sons. However, on December 23 last year, he sold his entire 0.68% stake in Young Poong Corp to his second son, Vice Chairman Chang Se-hwan. This led to interpretations that the advisor might be favoring Vice Chairman Chang Se-hwan.
Both Vice Chairman Chang Se-joon and Vice Chairman Chang Se-hwan face questions regarding their management capabilities. Vice Chairman Chang Se-joon became CEO of Korea Circuit, a printed circuit board (PCB) manufacturer, in March 2020. Korea Circuit's recent performance has been poor. Revenue dropped 16.57% from 1.5969 trillion KRW in 2022 to 1.3322 trillion KRW in 2023. Operating profit also shifted to an operating loss of 32.1 billion KRW in 2023 from an operating profit of 99.2 billion KRW in 2022. The deficit continued through the first three quarters of 2024, with revenue of 1.0717 trillion KRW and an operating loss of 23.3 billion KRW.
Kim Min-chul, a researcher at Kyobo Securities, analyzed, "(The deficit at Korea Circuit) is mainly due to the low utilization rate of the semiconductor package PCB division and the burden of depreciation costs, and the poor sales of memory-oriented PCBs expanded the scale of the deficit. Smartphone motherboard (HDI) sales also declined due to the impact of slowed sales from client companies."
Vice Chairman Chang Se-hwan took office as CEO of KG Trading (formerly Sorin Corporation) in December 2013 and moved to Young Poong E&E in June 2024. It is reported that the Korea Zinc management dispute influenced this move. Korea Zinc is the largest shareholder of KG Trading, holding a 49.97% stake. The rumor is that Vice Chairman Chang stepped down voluntarily because he anticipated being dismissed by Korea Zinc.
KG Trading's revenue fell 37.22% from 2.4355 trillion KRW in 2022 to 1.529 trillion KRW in 2023, and operating profit decreased 69.30% from 57 billion KRW to 17.5 billion KRW during the same period. In the first three quarters of 2024, it recorded 803 billion KRW in revenue. The decline in performance has continued since 2022.
The deterioration of KG Trading's performance is attributed to the performance of Young Poong Corp's Seokpo Smelter. KG Trading had been responsible for the transport and sale of non-ferrous metals produced by the Seokpo Smelter. However, the smelter's utilization rate recently plummeted due to worker fatalities and environmental issues.
In the long term, the eldest daughter, Chang Hye-sun, could play a major role in the direction of Young Poong Corp's management. Chang Se-joon, Chang Se-hwan, and Chang Hye-sun each own 33.33% of CK shares. However, Chang Hye-sun has rarely appeared in public.
Some have raised the possibility that after securing management rights of Korea Zinc, Vice Chairman Chang Se-joon and Vice Chairman Chang Se-hwan would take over Young Poong Corp and Korea Zinc respectively to separate the affiliates. However, with Young Poong Corp's failure to secure Korea Zinc, this scenario cannot be realized.
A spokesperson for Young Poong Corp stated, "Young Poong Corp is in a state where ownership and management are separated," adding, "There is no news of any special changes at this time."