Exclusive
TKG Taekwang subsidiary buys 10 billion KRW worth of real estate from Chairman

[비즈한국] An investigation by BizHankook has confirmed that a real estate development subsidiary of TKG Taekwang Group (formerly Taekwang Industrial) has recently purchased a detached house in Gimhae, Gyeongnam, owned by Chairman Park Joo-hwan, the second-generation founder and leader of the group. It has been identified that the company has been acquiring real estate in the Gimhae area held by Chairman Park's family since 2022, with the confirmed purchase amount reaching 10 billion KRW to date. BizHankook asked TKG Taekwang for the background of these real estate acquisitions and the criteria for determining the sale prices, but could not obtain a response.

TKG Development continues to acquire detached houses, etc., from owner family

According to BizHankook's investigation, TKG Development, a real estate development subsidiary of TKG Taekwang Group, purchased a detached house and plot of land in Gimhae, Gyeongnam, previously held by TKG Taekwang Group Chairman Park Joo-hwan, for a total of 7.5 billion KRW on the 19th. Both sides signed a direct real estate sales contract on the same day and completed the transfer of ownership registration. Given that a financial institution established a collateral security (geunjeodang) with a maximum bond amount of 7.7 billion KRW on the property that same day, it appears that approximately 7 billion KRW was financed through a mortgage loan.

This property consists of land that Chairman Park Joo-hwan inherited from his late father, along with a detached house built on it. In January 2020, Chairman Park inherited the land previously owned by his father, the late Chairman Park Yeon-cha, jointly with his mother, Honorary Chairwoman Shin Jung-hwa, and his sisters Seon-young, Ju-young, and So-hyun. Later, he acquired the full ownership of the entire plot (2,424㎡) from his mother and sisters, and in July 2023, he built a two-story detached house (total floor area of 658㎡).

This is not the first time TKG Development has bought property from the owner's family. In July of this year, the company purchased 419㎡ of farmland located to the north of Chairman Park Joo-hwan’s detached house for about 400 million KRW. In May 2022, it bought another two-story detached house and the surrounding plot (1,899㎡) for about 2.2 billion KRW. These were all properties inherited by Chairman Park, his mother, and his sisters from the late Chairman Park Yeon-cha. The value of properties TKG Development has purchased from the owner family to date reaches 10 billion KRW among those confirmed.

TKG Development, a company under the control of Chairman Park Joo-hwan

TKG Development is the real estate development subsidiary of TKG Taekwang Group. It was founded in February 2008 under the name Jeongsan Company and changed its name this May. Currently, it is conducting urban and industrial complex development projects in Korea, as well as in Vietnam and Myanmar. Last year's sales were around 18.1 billion KRW. Since January 2023, it has been pursuing a project after receiving an investment of the Samgye-Najon district urban development site in Gimhae, Gyeongnam, from TKG Taekwang. TKG Development is a wholly-owned subsidiary of TKG Taekwang, and its headquarters is also located in the TKG Taekwang main building in Gimhae.

TKG Taekwang (formerly Taekwang Industrial) is a footwear manufacturing company founded by the late Chairman Park Yeon-cha in 1980. After being selected as a partner for the global sports brand Nike in 1987, it grew its business through an original equipment manufacturing (OEM) model. Its consolidated revenue last year was 3.8655 trillion KRW, with an operating profit of 376.1 billion KRW. It controls 41 domestic and overseas subsidiaries, including the listed petrochemical companies TKG Huchems069260 and TKG Aegang022220. After his father, Chairman Park Yeon-cha, passed away in January 2020, Chairman Park Joo-hwan inherited TKG Taekwang shares and became the largest shareholder (with a 46% stake).

Chairman Park Joo-hwan currently serves as the CEO of TKG Taekwang. He joined the board of directors as an internal director in September 2011 at the age of 28, and took office as CEO in January 2020 at the age of 36, following the passing of Chairman Park Yeon-cha. In March of the same year, he succeeded his father to become the group's second chairman. He served as an internal director at TKG Development in 2018 and as CEO in February 2020, before resigning in March of the following year. However, TKG Development remains a wholly-owned subsidiary of TKG Taekwang and is still under the control of Chairman Park Joo-hwan, who serves as CEO of TKG Taekwang.

BizHankook asked TKG Taekwang for the background behind TKG Development's purchase of properties from Chairman Park Joo-hwan's family and the criteria for the sale prices, but no response was received.