Kim Nam-ho, honorary chairman of DB Group, had the voting rights for his DB shares restricted for the past 20 years and has only recently had them restored. Although Honorary Chairman Kim has long been the largest shareholder of DB, the holding company of DB Group, having received the equity from his father, he has not been able to exercise his voting rights.
According to the business and legal circles on the 3rd, Kim Jun-ki, the founder of DB Group, restricted the voting rights of the 840,000 shares of Dongbu Precision Chemical (now DB) that he gifted to Honorary Chairman Kim in 2004, when he gave them to his son. Although the equity percentage changed after Dongbu Precision Chemical went through a merger with Dongbu C&I, the voting rights restriction remained in place and was lifted around last year.
Founder Kim also appears to have restricted the voting rights for the 448,412 shares of Dongbu Precision Chemical that he gifted to his daughter, Kim Joo-won, vice chair of DB Group.
As of the end of June this year, the largest shareholder of DB is Honorary Chairman Kim, who holds 16.83%. Founder Kim holds 15.91%, while Vice Chair Kim has 9.87%. Although Founder Kim stepped down from his position as the largest shareholder after gifting equity to his children, he has maintained significant influence as the de facto largest shareholder by exercising voting rights over his children's shares.
Founder Kim returned as an unregistered executive in 2021 after stepping down from his position as chairman due to a sexual harassment scandal in 2017. During this time, he did not participate in day-to-day management but maintained the group's control by making key decisions regarding personnel and investments.
Although Founder Kim is not the largest shareholder of either DB or DB Insurance, he is designated as the same person by the Fair Trade Commission for large business groups.
With Honorary Chairman Kim and Vice Chair Kim now able to exercise their voting rights, Founder Kim's influence is expected to diminish. There are prospects that Honorary Chairman Kim may abruptly step down from the position of chairman and also resign as an internal director, following conflicts with his father that arose last June. Honorary Chairman Kim's term as an internal director extends until March 2027.
Although Honorary Chairman Kim can now exercise voting rights independently, there is a view that it is unlikely he will engage in a management dispute or equity conflict against his father's wishes, given that Founder Kim still holds a significant amount of equity, and considering the equity held by affiliates, relatives, and allies that surpasses that of Honorary Chairman Kim.
For Honorary Chairman Kim to be reappointed as an internal director after March 2027, he must obtain a majority of the voting rights from shareholders attending the general meeting and at least one-fourth approval of the issued shares. If Honorary Chairman Kim wants to be appointed as an internal director by his own means, additional equity will be required.