This article was posted on Jan. 30, 2026, at 4:03 p.m. on ChosunBiz MoneyMove (MM).
The financial burden on the LS Group from halted listing plans for its affiliates is becoming a reality. Lee Jae-myung's criticism of "duplicate listings" is likely to mark an inflection point for LS Group's strategy, which had been expanding through initial public offerings by subsidiaries.
On the 30th, according to investment banks and the financial investment industry, LS Cable & System acquired 15,432,097 common shares of LS Eco Advanced Materials (36.13% stake) held by UAMCO and Kiwoom Securities in an off-market transaction. With this, LS Eco Advanced Materials became a wholly owned subsidiary of LS Cable & System. The acquisition amount was 70.093 billion won, and the acquisition price per share was 4,542 won.
LS Eco Advanced Materials was established in 2022 when LS Cable & System spun off its winding (copper wire) business through a physical division. It supplies winding for drive motors to Hyundai Motor and Kia electric vehicles and holds more than 70% of the domestic market. LS Eco Advanced Materials raised investment from financial investors in February of the year after its establishment. At that time, the investment price was about 3,880 won per share, and the financial investors were guaranteed an internal rate of return of about 6%.
Along with raising investment, LS Eco Advanced Materials signed agreements with the financial investors and shareholders. The agreement granted the investors a tag-along right allowing them to sell to a third party the equity of LS Eco Advanced Materials held by LS Cable & System if LS Eco Advanced Materials failed to list within the specified period. LS Cable & System also secured the right to buy the equity held by the financial investors if they notified exercise of the tag-along right.
With this deal, LS Cable & System effectively abandoned an IPO by buying all the equity of LS Eco Advanced Materials held by the financial investors. However, the equity transaction was made by mutual agreement rather than through exercise of the investors' tag-along right. A spokesperson for LS Cable & System said, "We did not actively pursue a listing," adding that it was an "equity transaction due to contract expiration."
The president's influence played a large role in putting the brakes on LS Group's aggressive affiliate IPO strategy. On the 22nd, Lee Jae-myung reportedly criticized the LS case at a luncheon with members of the Democratic Party of Korea's KOSPI 5000 special committee, asking, "Is this still happening?" LS Group immediately halted listing procedures for Essex Solutions and announced a shareholder return plan centered on share buybacks and increased dividends.
The problem is the "financial bill" LS Group will have to shoulder because of this listing withdrawal. As seen with Essex Solutions and LS Eco Advanced Materials, parent companies may have to directly repay funds from financial investors that were raised on the premise of an IPO. Financial investors who invested aiming for high returns based on a listing are also in a difficult position.
Affiliates of LS that had raised outside investment on the premise of an IPO include LS Eco Advanced Materials, LS Essex Solutions, and LS MnM. LS Cable & System, LS Mtron, LS Power Solution, and LS E-Link are also potential IPO candidates. LS EV Korea also raised investment on the premise of a listing, but its listing steps were tangled due to poor performance, and it is in a legal dispute with private equity firm Keystone Partners.
So far, LS Group has drawn the ire of small shareholders by frequently listing affiliates. Besides the holding company LS, listed affiliates include LS Networks, LS Electric, LS Marine Solution, LS Securities, LS Eco Energy, LS TeraUtec, and LS Materials.