[비즈한국] With the passing of former chairman Kim Dong-yeon, the founder of Bukwang Pharm, the 7.15% stake left by the deceased is expected to become a key variable for OCI Holdings, the company's largest shareholder, in securing its stake. To satisfy the requirements for a holding company under the Fair Trade Act, OCI Holdings must increase its stake in Bukwang Pharm from the current 17.11% to over 30% by September 2027. The stake held by the late chairman exceeds half of the amount required to be additionally acquired. While the bereaved family’s intentions regarding a sale and OCI Holdings’ acquisition plans have not been confirmed, this is the reason why attention is focused on the future direction of these shares following the inheritance.
Former Chairman Kim passed away on the 26th. Bukwang Pharm is a pharmaceutical company established in 1960, and the late chairman co-founded the company with honorary chairman Kim Sung-ryul. Following the passing of honorary chairman Kim in 2006, the late chairman led the company, and in March 2013, the company transitioned to a second-generation management system as his son, Kim Sang-hoon, was appointed CEO.
Founder's Stake Exceeds Half of the Required Amount
As of the end of June this year, the largest shareholder of Bukwang Pharm is OCI Holdings. OCI Holdings holds 16,878,791 shares, representing a 17.11% stake. Former chairman Kim Dong-yeon held 7,053,266 shares (7.15%).
With the late chairman's passing, the shares have become subject to inheritance. Since inheritance begins at the moment of death, the date of commencement is the 26th. The bereaved family members identified through the obituary are his spouse, Baek Jung-soon, and his children, Kim Sang-hoon, Kim Eun-joo, and Kim Eun-mi.
The direction of the late chairman's stake is drawing attention because the amount of additional Bukwang Pharm shares that OCI Holdings needs to secure is significant.
As OCI Holdings transitioned into a holding company structure in 2023, it has been subject to the requirements for holding stakes in listed subsidiaries under the Fair Trade Act. A holding company is required to hold at least 30% of its listed subsidiaries. OCI Holdings was originally required to increase its stake in Bukwang Pharm to 30% by September of last year, but it was granted an additional two-year grace period by the Fair Trade Commission. Consequently, the deadline to meet the stake requirement has been extended to September 22, 2027.
OCI Holdings also participated in Bukwang Pharm's paid-in capital increase last year, raising its stake from the 11% range to 17.11%. Based on the current stake, an additional 12.89 percentage points (p) must be acquired to reach the 30% requirement.
The 7.15% stake held by the late chairman is more than half of this shortfall. By simple calculation, if OCI Holdings were to acquire the entire stake, its holdings would increase to approximately 24.26%. The additional stake needed to reach 30% would decrease to about 5.74%p.
However, it has not been confirmed whether the bereaved family plans to sell the inherited Bukwang Pharm shares or whether OCI Holdings intends to acquire them. Depending on the inheritance process and the results of property division, there is a possibility that the late chairman's shares could be divided among multiple heirs.
The late chairman's son, former Bukwang Pharm CEO Kim Sang-hoon, previously disposed of a significant portion of his holdings while OCI was securing management rights for Bukwang Pharm. Former CEO Kim sold his stake through an off-market transaction in March 2022, leaving 568,504 shares. Looking at the report on major shareholdings submitted by OCI Holdings in July 2025, the former CEO's holdings were confirmed to be unchanged, and he is classified as a specially related person. An OCI Holdings official explained, "Since we did not purchase 100% of the existing shareholders' stakes when acquiring Bukwang Pharm, we specified matters regarding the joint exercise of voting rights with the former CEO in the contract to prevent future disputes."
In contrast, the late chairman's stake was maintained even after OCI acquired management rights. While the percentage decreased due to the increase in the total number of issued shares from Bukwang Pharm's paid-in capital increase, the number of shares held remained unchanged.
Inheritance Tax Financing Remains a Variable… Stock Transaction Between Parties Undecided
Inheritance tax could also be one of the variables determining whether the shares are held in the future.
The value of inherited listed stocks is assessed based on the average closing price for two months before and after the date of inheritance. Applying the simple closing price of 3,930 won from the 23rd, the value of the 7,053,266 shares of Bukwang Pharm held by the late Kim Dong-yeon is approximately 27.7 billion won. If we simply apply the lump-sum deduction and spouse inheritance deduction, excluding other assets, debts, or prior gifts, the estimated inheritance tax is approximately 11.6 billion won. However, the actual tax amount may vary depending on future stock prices, the total inherited estate, and the division of property among the heirs.
In the pharmaceutical and biotech industry, there have been cases where the burden of inheritance tax after the founder's passing led to changes in stake and governance structures. After the passing of founder Lim Sung-ki in 2020, the Hanmi Pharm Group saw his stake in Hanmi Science divided among his spouse and children, with the owner family facing an inheritance tax exceeding 500 billion won.
The heirs paid the inheritance tax through an installment payment plan, but securing the funds for inheritance tax led to major issues in the group's governance structure. In 2024, when Chairwoman Song Young-sook and Vice Chairwoman Lim Ju-hyun pushed for integration with the OCI Group, brothers Lim Jong-yoon and Lim Jong-hoon opposed it, sparking a management rights dispute. Since then, shareholder meeting battles and stake transactions between major shareholders have followed, and Chairwoman Song and Vice Chairwoman Lim sold a portion of their Hanmi Science stakes to secure inheritance tax funds.
The situation at Bukwang Pharm is different from the Hanmi Pharm Group. The family of the late chairman already handed over management rights to OCI in 2022, and OCI Holdings maintains its position as the largest shareholder. However, given that the timing of the inheritance of a large volume of listed shares overlaps with the time OCI Holdings needs to secure additional shares, the family's decision to hold or dispose of the shares could influence how OCI Holdings proceeds.
Methods available to OCI Holdings include securing additional shares through market purchases or off-market transactions such as block deals. Conversely, disposing of the Bukwang Pharm stake and dissolving the subsidiary relationship itself is also a viable option under the Fair Trade Act. OCI Holdings secured additional time to review the Bukwang Pharm stake issue when it received an extension for meeting the requirements from the Fair Trade Commission last year.
An OCI Holdings official stated, "Nothing has been decided regarding plans to secure additional Bukwang Pharm shares, and we will explain via public disclosure or press releases once concrete details are finalized."
Meanwhile, Bukwang Pharm is also pushing to expand its new drug development business. Its Danish subsidiary, Contera Pharma, is developing the Parkinson's disease morning akinesia treatment CP-012 while establishing Three Point Therapeutics to focus on the RNA business. Bukwang Pharm plans to announce its official launch in November. Three Point will inherit the RNA pipeline held by Contera Pharma and the joint RNA new drug research contract signed last year with Lundbeck, a Danish CNS-specialized pharmaceutical company.