On the 19th, Samhwa Paint surged 21% intraday. Investor sentiment appears to have been stirred as talk of a potential management control dispute emerged after Chair Kim Jang-yeon recently died.
As of 9:39 a.m. that day, Samhwa Paint was trading at 9,610 won on the Korea Exchange, up 1,680 won (21.19%) from the previous session.
Chair Kim is the second son of the late former Chair Kim Bok-gyu, a co-founder of Samhwa Paint, and an owner second-generation executive who has led the company since becoming CEO in 1994. As of the third quarter, Kim was also the largest shareholder, holding 22.76% equity in Samhwa Paint.
With Chair Kim's death, there is talk that the eldest daughter, Executive Vice President Kim Hyeon-jeong, 41, could succeed to management. However, some say her control may be insufficient, as her equity stake is only 3.04%. Her younger brother, Kim Jeong-sik, holds no equity, and her older sister, Kim Gwi-yeon, holds a 1.5% stake.
Meanwhile, the sons of the late former Chair Yun Hee-jung, a co-founder of Samhwa Paint, Yun Seok-jae and Yun Seok-cheon, hold 6.90% and 5.52% equity, respectively. Citing the precedent of a management control dispute during the transition to an owner second-generation management system in 2008, the market is also raising the view that the possibility of future conflict over control cannot be ruled out.