[비즈한국] LS006260 Group has been facing internal and external challenges since the start of 2026. With a fatal accident at its key affiliate LS Mtron raising concerns about its poor safety management systems, critics point out that the lack of gender diversity on the board of directors and the absence of shareholder communication regarding the spin-off listing of a subsidiary have laid bare the group's overall ESG (Environmental, Social, Governance) shortcomings. In particular, the group is facing mounting pressure to improve its governance, as it recently withdrew its listing plan following strong criticism from the government.
LS announced on the 28th that a researcher at the LS Mtron laboratory was found collapsed while performing research duties on the 20th and passed away after being taken to the hospital. The Gyeonggi Nambu Provincial Police Agency's Serious Accident Investigation Team is determining the cause of death, while the Ministry of Employment and Labor is investigating potential violations of the Occupational Safety and Health Act and the Serious Accidents Punishment Act.
Although the accident occurred in a laboratory rather than at a factory or construction site, it has drawn attention from the business and labor sectors, as long-term overwork could be recognized as a serious industrial accident if work-relatedness is established.
This accident is the third serious disaster at LS Group in the past year, putting the group's safety management capabilities under scrutiny.
LS established a group-level ESG committee in 2021 and has emphasized safety management by setting up dedicated organizations to prevent serious accidents at each affiliate. However, in August last year, a subcontractor worker fell to their death at the LS Electric Busan plant expansion site, and in September of the same year, a subcontractor worker lost their life after colliding with a forklift at the LS MnM Onsan Smelter in Ulsan.
LS Group is also criticized for board diversity, a pillar of corporate governance, for merely "checking the boxes" to avoid legal regulations. In the case of LS, the only woman among its 7 directors is Park Hyun-joo, President of the Korea Women Inventors Association. At LS Electric, excluding Professor Song Won-ja of the School of Business at Suwon University, all 8 remaining directors are male. The board of the group's key affiliate, LS Cable & System, is composed entirely of men. Furthermore, critics point out that since President Park Hyun-joo and Professor Song Won-ja are outside directors, they have little real influence on management decisions. Under Article 165-20 of the Financial Investment Services and Capital Markets Act, listed companies with assets of 2 trillion won or more cannot have a board composed of only one gender.
Recently, the issue of protecting shareholder rights has emerged as the core of governance risk. LS Group faced criticism from shareholders for a "split-off listing" after pushing for the KOSPI listing of its U.S.-based great-grandchild company, Essex Solutions. As controversy spread, with retail shareholders threatening collective action to block the listing, the government intervened. It is reported that President Lee Jae-myung pointed out the issue of double-listing by naming LS during a luncheon with the Democratic Party's KOSPI 5000 Special Committee on the 22nd.
Ultimately, LS withdrew the listing application for Essex Solutions on the 26th. To restore market confidence, the company also announced plans to retire 200 billion won worth of treasury shares next month and increase shareholder dividends by more than 40% compared to the previous year. While the company stated it aims to practice substantive shareholder protection and returns, some in the industry view these as measures taken under pressure from shareholders and the government.
Currently, LS Group's ESG rating is relatively low, not reflecting its 15th-place ranking in the business world. According to the Korea Institute of Corporate Governance and Sustainability (KCGS) ESG rating results, excluding LS Electric, which received an A (Excellent) for two consecutive years, other affiliates are rated B+ (Good) or lower. The holding company, LS, saw its rating drop from A in 2024 to B+ in 2025, and LS Networks000680 fell from B+ to C (Weak). LS Marine Solution060370 and LS Securities007800 have received a C rating for two consecutive years, while LS Materials received a B rating for the first time in 2025.