[비즈한국] It has been confirmed that Lee Dong-hyung, nephew of former President Lee Myung-bak and eldest son of former DAS CEO Lee Sang-eun, has been appointed CEO of Hongeun Planning, a subsidiary of DAS. While Hongeun Planning was actively involved in the real estate business in the early to mid-2000s, such as by purchasing land in Cheonho-dong, there is currently no evidence of significant business activity.
According to the corporate registry, Hongeun Planning moved its headquarters from the Yeongpo Building in Seocho-gu, Seoul, to the 5th floor of the DAS Seoul office in Seocho-gu this July. The Yeongpo Building is owned by the Cheonggye Foundation. Subsequently, on August 12, Hongeun Planning appointed Lee Dong-hyung as CEO. The former CEO, Cho Jin-hyun, has resigned. It has been confirmed that Cho, who previously served as CEO of both DAS and Hongeun Planning, stepped down from both positions effective August 12.
Hongeun Planning is a real estate company, and as of the end of last year, it is 100% owned by DAS. During the 17th presidential election in 2007, the company faced allegations of conducting real estate transactions using non-public information. It was alleged that the company purchased real estate in anticipation of the Cheonho-dong development to reap massive profits. Although the company was investigated by the prosecution in connection with this, it was not indicted.
Biz Hankook previously reported exclusively that former CEO Lee Sang-eun resigned from his position at DAS on August 12. In political and business circles, it was expected that Lee Dong-hyung would emerge to the forefront of DAS management following Lee Sang-eun's departure. This is because former CEO Lee Sang-eun and his specially related persons are the largest shareholders of DAS, and there are no significant forces threatening their management control (Related Article [Exclusive] ‘Lee Myung-bak’s Brother’ Lee Sang-eun Resigns as DAS CEO After 39 Years).
However, DAS appointed Ahn Bong-heon as the successor CEO, and Lee Dong-hyung was appointed as CEO of Hongeun Planning instead of DAS. Currently, Hongeun Planning does not conduct any significant business. According to the DAS audit report, Hongeun Planning generated no revenue last year. Its total assets were approximately 1.7 billion KRW as of the end of last year, which is negligible compared to the total assets of DAS, which reached 1.2106 trillion KRW at the end of last year.
There are various interpretations regarding why Lee Dong-hyung, a leading candidate for the succession of DAS, was appointed as the CEO of Hongeun Planning. The first possibility is that Hongeun Planning might resume business activities. DAS has no notable business other than manufacturing automotive parts. In other words, if the automotive industry takes a downturn, DAS lacks an alternative source of revenue. With the recent volatility in the real estate market, there is potential for securing new revenue if Hongeun Planning resumes operations. No news regarding the resumption of business has been released yet.
Another interpretation exists. Analysts suggest that by taking the helm at Hongeun Planning, Lee Dong-hyung has clarified that both DAS and Hongeun Planning are companies belonging to the family of former CEO Lee Sang-eun, rather than the side of former President Lee Myung-bak. During former President Lee Myung-bak's trial, mentions were made of Hongeun Planning providing funds to companies associated with Lee Si-hyung, the son of the former president. As a result, Hongeun Planning has a strong image as a company tied to the former president's side. However, Hongeun Planning is a subsidiary of DAS, and the former president officially holds no shares in DAS.
The relocation of the headquarters from the building owned by the Cheonggye Foundation to the DAS Seoul office is interpreted in the same context. The Cheonggye Foundation is a foundation established by the former president, and his son, Lee Si-hyung, serves as a board member.
Lee Dong-hyung is currently the sole director of Hongeun Planning. Because there is no special business activity and only one director, some are gossiping that his appointment as CEO is merely symbolic. The political and business worlds are watching to see whether Lee Dong-hyung will actually restart Hongeun Planning's real estate business or if he will hold the position only for symbolic purposes.