[비즈한국] Former Hankook & Company Advisor Cho Hyun-shik has been granted access to the board meeting minutes of Hankook Precision Works, a company in which he holds shares alongside his younger brother, Hankook & Company Group Chairman Cho Hyun-bum. This follows a court ruling that partially accepted the former advisor's request for inspection and copying of the board minutes. As the scope of the inspection includes minutes detailing executive compensation—including that of Chairman Cho—and the company's investment decision-making processes, the governance of this unlisted affiliate, where the brothers' interests are intertwined, has emerged as a key issue.
On the 19th, the 21st Civil Division of the Daejeon District Court (Presiding Judge Kim Mae-kyung) partially granted the request for inspection and copying of board meeting minutes filed by former Hankook & Company Advisor Cho Hyun-shik against Hankook Precision Works (formerly MKT). The ruling requires the company to disclose to the former advisor the board minutes prepared between 2018 and 2024 regarding executive salary determinations, as well as investment decisions and their implementation processes. Previously, in February, the former advisor had filed a court application requesting access to all board minutes and supplementary documents created by Hankook Precision Works since 2018.
The court stated, “Although Hankook Precision Works submitted documentation arguing that the former advisor's exercise of his right to inspect and copy board minutes was unjustified, such materials alone are insufficient to conclude that the applicant’s request constitutes an improper exercise of a shareholder's rights lacking a legitimate purpose.” Based on this reasoning, the court partially upheld his request.
The reason behind former Advisor Cho’s desire to inspect the documents is to verify the appropriateness of executive salaries and investments. Last December, he sent an official letter to Hankook Precision Works requesting the inspection and copying of documents related to executive compensation and investments. He argued that the verification was necessary due to the significant salary increases following Chairman Cho’s appointment and a recent rise in investments in affiliates. Chairman Cho has served as a non-executive director of Hankook Precision Works since March 2018.
In his letter to the company last December, former Advisor Cho stated, “Since Chairman Cho Hyun-bum took office as a non-executive director in 2018, short-term compensation has increased significantly. Given the sharp rise in short-term pay between 2022 and 2024, verification of the appropriateness of executive compensation is necessary. Furthermore, as of 2024, Hankook Precision Works holds approximately 134 billion won in retained earnings; therefore, it is necessary to verify the circumstances behind the recent increase in investments in affiliates and whether proper analysis was conducted on these investment targets.”
Hankook Precision Works rejected the request in a reply sent the same month, claiming that executive salary payments and investment decisions were conducted properly in accordance with regulations and procedures. The company argued, “There is strong doubt as to whether a request to inspect accounting books, particularly board minutes, is permissible based on such vague and indefinite reasons as the claim that short-term compensation has increased. Furthermore, the comprehensive request for all investments from 2018 to 2024 falls outside the permissible scope.”
However, the court partially accepted the position of former Advisor Cho. The court determined that a shareholder's right to inspect and copy board minutes has more relaxed requirements than the right to inspect accounting books, and that a shareholder is not necessarily required to provide detailed justification when requesting such inspection. Even if justification were required, the court viewed the former advisor's prior letters—which cited the need to verify the appropriateness of executive pay—as sufficient disclosure of the context and purpose of the request.
In particular, the court acknowledged the need to verify the issue of compensation paid to Chairman Cho during his incarceration. In his application, the former advisor argued that it was necessary to determine the appropriateness of the salary received by the Chairman while he was in custody. Hankook Precision Works countered by stating, “There is no legal basis to prohibit the payment of compensation to a director simply because they are in custody, and Chairman Cho continued to perform his duties as a director even during that period.” Regarding this, the court ruled, “It appears there is a necessity for the shareholder to inspect and copy the board minutes to verify the validity of Hankook Precision Works' claims.”
On the same day, the court dismissed the application for an injunction to allow the inspection of accounting books filed by the former advisor against Hankook Precision Works. While the court recognized that the former advisor, as a 20% shareholder, holds the right to inspect accounting books under commercial law, it judged that vague reasons such as “verifying the appropriateness of executive compensation” or “verifying investment suitability” were insufficient to specifically identify which of the company's business activities were illegal or improper.
Hankook Precision Works is a mold manufacturer for the Hankook & Company Group. Established in August 1973, it produces tire molds and precision machine parts necessary for tire manufacturing. As of the end of 2025, it holds approximately 197.7 billion won in assets, recording 76.1 billion won in revenue and 14.7 billion won in operating profit for the year. Its shares are held by Hankook Tire & Technology (50.1%), Chairman Cho Hyun-bum (29.9%), and former advisor Cho Hyun-shik (20%).
Chairman Cho Hyun-bum is the largest shareholder of Hankook & Company, the holding company of the group. In 2020, the founder, Honorary Chairman Cho Yang-rai, sold all his shares in Hankook & Company to his second son, Chairman Cho Hyun-bum. Chairman Cho became the largest shareholder (42.03%), surpassing his older brother (18.93%), older sister Cho Hee-won (10.61%), and Cho Hee-kyung, chair of the Hankook Tire Foundation (0.81%). The group is the 31st largest business conglomerate in Korea (with approximately 21 trillion won in fair assets), encompassing 26 affiliates, including tire manufacturer Hankook Tire & Technology.
Meanwhile, Chairman Cho Hyun-bum was sentenced to three years in prison in May of last year for embezzlement and breach of trust involving over 20 billion won. He had previously been detained during the investigation in May 2023 but was released on bail in November of the same year. Recently, the Supreme Court upheld a two-year prison sentence, confirming his guilt regarding some of the embezzlement and breach of trust charges, such as the personal use of corporate cards and company vehicles. Chairman Cho was also previously detained in 2019 for charges involving taking kickbacks from suppliers and siphoning company funds while serving as the CEO of Hankook Tire.