Hansol Group's third-generation management has officially started.
Jo Sung-min (36), the eldest son of Jo Dong-gil (69), chairman of Hansol Group, is in charge of group strategy, while Hong Kyung-rok (45), the chairman's son-in-law, oversees the management of Hansol Paper, a core subsidiary of the group.
Hansol Group, which separated from the Samsung Group in 1993, has established a management system under Chairman Jo Dong-gil, alongside his son and son-in-law, in the last two years. This marks approximately 22 years since Chairman Jo has led Hansol Group.
Chairman Jo is the third son of the late Lee Byung-chul, founder of Samsung, and his late daughter, Lee In-hee, a former advisor to Hansol Group, and he became chairman of Hansol Group in 2002, succeeding the late advisor.
◇ The eldest son handles group strategy planning, while the son-in-law manages the core subsidiary.
In this situation, Vice Chairman Jo purchased 420,000 shares of Hansol Holdings, the group's holding company, for about 1 billion won from the 18th to the 22nd of last month. As a result, Vice Chairman Jo's ownership stake in Hansol Holdings increased from 3% to 4%.
While the scale of the stock purchase is not large, the industry views this equity acquisition by Vice Chairman Jo as a 'starting signal for third-generation succession.'
Jo, who graduated from Princeton University with a degree in economics, worked as a researcher at an asset management firm before joining Hansol Holdings in 2016. He moved to Hansol Paper in 2019 and was promoted to an executive in 2021, leading the company's eco-friendly initiatives. Subsequently, he became the vice chairman of Hansol Holdings last October and currently handles group planning and strategy under his father, Chairman Jo.
Chairman Jo's son-in-law, Hong Kyung-rok, was appointed CEO on the 1st of last month after serving as the head of the printing and thermal paper division at Hansol Paper. At that time, there were discussions in the market about whether the chairman's son was being bypassed as Hong took the role of CEO of a core subsidiary, but this turned out to be untrue.
This is because Vice Chairman Jo controls the overall group, including developing strategies at the group's holding company, Hansol Holdings, while CEO Hong assists Chairman Jo and Vice Chairman Jo as the head of a core subsidiary.
Hong, who worked at global finance and investment firms, including Korea Investment Corporation, joined Hansol Group in 2014. Since then, he has handled strategy, marketing, and overseas business within the group.
Jo Na-young (41), the chairman's eldest daughter and Hong's wife, is currently not involved in the management of Hansol Group. Jo, who majored in art history in the United States, previously worked as a curator at the Samsung Leeum Museum of Art. Both Hong and his wife Jo currently do not hold any equity in Hansol Holdings.
◇ Low equity of 4%, improving performance is a challenge
Hansol Group oversees subsidiaries such as Hansol Paper, Hansol Technics, Hansol Logistics, Hansol Home Deco, Hansol Paypertek, and Hansol PNS through its holding company, Hansol Holdings.
Chairman Jo holds a 17.23% stake in Hansol Holdings as the majority shareholder, while Vice Chairman Jo holds a 4% stake. To succeed the management rights, Vice Chairman Jo faces the challenge of raising his relatively low equity of 4%. Currently, there are discussions about him securing funds to directly purchase shares of Hansol Holdings or utilizing unlisted companies for equity acquisition.
A governance expert said, ‘Vice Chairman Jo may consider increasing his equity stake in Hansol Holdings by having a high equity unlisted company or by establishing a new company to merge with a listed company.’ However, as of now, no company where Vice Chairman Jo holds a significant stake has been publicly known.
The rebound in performance of major group subsidiaries is also considered a challenge for Vice Chairman Jo, who is expected to lead Hansol Group in the future. Hansol Paper, which saw a 63% decline in operating profit last year, continues to experience a downturn in performance this year. Although Hansol Paper's cumulative sales for the third quarter reached 1.6532 trillion won, a 2.4% increase compared to the previous year, its operating profit decreased by 6.9% to 34.7 billion won.
For the third quarter, Hansol Logistics recorded sales of 516.1 billion won and operating profit of 18.7 billion won, down 5.4% and 24%, respectively, compared to the previous year. Meanwhile, the sales (87.5 billion won) and operating profit (3.22 billion won) of Hansol Technics also fell 15.1% and 38.5%, respectively.