This article was published on May 27, 2025, at 10:34 a.m. on the ChosunBiz MoneyMove site.
It has been reported that Hoban Group secured over 3% equity of LS Group's holding company, LS, as of the end of April. In March, it was noted that Hoban Group held less than 3% equity of LS, but it has since acquired more.
There are observations in the business community that Hoban's acquisition of more than 3% equity in LS sends a message that it could exert influence over LS Group's management activities. Under the Commercial Act, a shareholder holding more than 3% of the total issued shares can demand access to the company's accounting records, copies, and convene a shareholder meeting. The acquisition of accounting records can be interpreted as preliminary work for legal actions against corporations or management, as it allows access to sensitive internal information or trade secrets.
Some speculate that the primary reason Hoban Group purchased LS equity is due to a legal dispute between its subsidiary Taihan Cable & Solution and LS Group's subsidiary LS Cable & System. The patent litigation between the two companies has escalated into a conflict involving their parent companies. Taihan Cable & Solution lost in the appeal regarding the patent infringement of a joint kit for bus ducts that was filed by LS Cable & System in 2019. The fact that Hoban Group holds equity in LS was revealed just before the appeal ruling.
Taihan Cable & Solution is also under police investigation for alleged technology leakage related to LS Cable & System's submarine cable factory design. Depending on the investigation's outcome, there is a possibility that it could lead to civil and criminal lawsuits. It is reported that LS has decided to refrain from responding to the police investigation results regarding the alleged theft of submarine cable technology until they are released.
A business source said, "It appears that Hoban Group raised its equity stake to the 3% range to pressure LS Group while avoiding the capital markets law's 5% rule (which requires disclosure if holding more than 5% equity)."
There are insights in the business community that LS may secure a majority of friendly equity, making it difficult for Hoban to threaten LS's management rights immediately. As of the end of last year, the largest shareholder, Koo Ja-yeol, chairman of the LS Board of Directors, along with about 40 individuals with special relationships, held 32.12% equity in LS.
After news of Hoban's equity purchase emerged, LS formed alliance lines with LIG Group and Hanjin Group in succession. LS has recently transferred its shares to Hanjin Group, which includes Korean Air, forming a shares alliance. Although the shares have no voting rights, selling them externally would provide voting rights, so it is interpreted that LS launched defenses of management rights using its shares. In late March, LS also entered into a strategic alliance agreement with LIG Group.