Cho Hyun-joon to Be Recognized as ‘Chongsu’ by the FTC | #scams | #elderlyscams
Hyosung Group chairman Cho Hyun-joon is expected to be recognized by the Fair Trade Commission (FTC) as “chongsu,” or the man in actual control of the group, on April 30.
Although Cho became the chairman of the group in 2017, the FTC has thus far regarded his father, honorary chairman Cho Seok-rae, as the group’s chongsu. The FTC is expected to accept Hyosung’s request that the group’s chongsu be changed from the honorary chairman to the incumbent chairman, considering that the elderly honorary chairman’s health is poor and all management judgments are being made by the incumbent chairman, one of his sons.
The biggest change Cho Hyun-joon has made after becoming a chairman was a shift to a holding company system. Hyosung Corp. put Hyosung TNC, Hyosung Advanced Materials, Hyosung Chemical, and Hyosung Heavy Industries under control.
Hyosung Group has been focusing on maintaining its world’s No. 1 position in the spandex business. Recently, the company joined hands with Linde Group to build the world’s largest liquefied hydrogen plant in Ulsan, Korea.
Last year, the group sold off Hyosung Capital for 375.2 billion won. Under the current law on holding companies, it had to sell the financial subsidiary to convert into a holding company system.
Hyosung is seeking a rebound in 2021 as it is emerging from a slump in 2020. All of its four key affiliates’ first-quarter earnings are expected to exceed their earnings a year earlier. Demand for their flagship products is recovering rapidly as they passed the tunnel of a slump triggered by the COVID-19 pandemic. Hyosung T&C, the largest subsidiary, is expected to record 179.5 billion won in operating profit in the first quarter of 2021, up 129 percent from a year before. Shares of Hyosung T&C jumped 166 percent from 213,000 won on Jan. 4, 2021 to 567,000 won on April 12.
However, Cho Hyun-joon has not completed governance restructuring. There is the issue of inheriting shares held by the honorary chairman. Currently, the senior Cho has stakes in Hyosung Corp. (9.43 percent), Hyosung T&C (8.19 percent), Hyosung Advanced Materials (10.18 percent) and Hyosung Heavy Industries (10.18 percent). Cho Hyun-joon, the first son of the honorary chairman, is leading the group together with Cho Hyun-sang, vice chairman and his younger brother. Although the two are on good terms now, a dispute may brew between them unless the stake inheritance issue is clearly resolved.