Korean firms are taking steps to help children and grandchildren of their current chiefs or founders take over the businesses in the future.

December 30, 2013 Leave a comment

2013-12-29 17:08

Power transfer taking shape at firms

By Choi Kyong-ae
The sons of Samsung Group and Hyundai Motor Group owners have been in the spotlight as heirs apparent in Korea’s business circles. Now the offspring of major food company leaders want to share the spotlight.  CJ Group took the lead as two children of Chairman Lee Jae-hyun recently joined major affiliates of the food-to-entertainment conglomerate.
Lee Sun-ho, 23, has had on-the-job training at CJ CheilJedang, a major food company, since he graduated in June from the financial economics department of Columbia University, a CJ spokesman said by telephone.
Lee Kyung-hoo, the chairman’s 28-year-old daughter, recently left CJ Educations to be part of the product-planning team of CJ O Shopping, a leading home-shopping channel, the spokesman said.
In fact, Chairman Lee, 53, is too young to have his son or daughter take over management control of the country’s 14th-biggest conglomerate by assets.
But Lee was arrested in July on charges of tax evasion, embezzlement and breach of duty. He is now in the hospital for treatment after kidney-transplant surgery. Investigations are underway and a court ruling will likely come in February, the spokesman said.
Unlike Samsung Chairman Lee Kun-hee, 71, and Hyundai Chairman Chung Mong-koo, 75, who are still at the helm of the chip and auto giants, respectively, CJ Group seems to have the same management risks being experienced by SK Group and Hanwha Group, whose chiefs are in jail for misdeeds.
That’s why CJ Group is stepping up its drive to have Chairman Lee’s two children learn how the company works and how to tackle the challenges ahead, experts said.  Lee Jae-yong, 45, at Samsung and Chung Eui-sun, 43, at Hyundai Motor are heirs apparent of the country’s two leading companies.
CJ Group is not alone in these efforts.
Two daughters of Daesang Group have major positions in the food company. Lim Sang-min, second daughter of Chairman Lim Chang-wook, was promoted in October to management and is in charge of new businesses. Her elder sister, Lim Se-ryong, the former wife of Samsung’s Lee Jae-yong, took the supervising role for the overall food business a year ago.
Last week, Dongwon Group named Kim Nam-jung, second son of group founder Kim Jae-chul, as vice chairman of the country’s biggest canned tuna provider.
Other food firms such as Mail Dairies, SPC Group, Sajo and Nongshim are also taking steps to help children and grandchildren of their current chiefs or founders take over the businesses in the future.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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