Kim Jun-ki, founder and chairman of DB Group, is interpreted as having established a mechanism to maintain his control over the group by gifting 840,000 shares of Dongbu Precision Chem (now DB) to his son, Kim Nam-ho, honorary chairman of DB Group, in 2004, while prohibiting him from exercising voting rights for 20 years.
In the legal community, setting a 20-year prohibition on exercising voting rights in a gift contract between wealthy individuals is seen as an unusually lengthy period, leading to an analysis that it would allow for damage claims in case of violation.
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[Exclusive] Kim Nam-ho, honorary chairman of DB, has had the 20-year voting right restriction lifted.
https://biz.chosun.com/industry/company/2025/09/03/EZ5SOVRHQZBYLKQB3FS5Q4CL5A/
In the sensitive chaebol family regarding inheritance and gifts, it is not uncommon to impose conditions when transferring assets. A representative example is the conditions revealed in the recent management dispute within the Kolmar Korea Group. Yun Dong-han, chairman of Kolmar, gifted 2.3 million shares of Kolmar Holdings to his eldest son, Yun Sang-hyun, vice chairman, and 1,289,064 shares of Kolmar BNH to his eldest daughter, Yun Yeo-won, with the condition of 'a tripartite management agreement.'
As the conflict among siblings grew, Chairman Yun Dong-han revisited the conditions of the gift and took legal action. He noted, "The gift was based on a tripartite management agreement, but the current management order is being undermined," and filed a lawsuit on May 30 against Vice Chairman Yun Sang-hyun, demanding the return of the shares.
It also appears that Founder Kim Jun-ki attached a condition to the gifted equity not to exercise voting rights. This could violate the principle of shareholder equality under the Commercial Act, but if notarized individually and included in the contract among shareholders, it is valid based on the principle of freedom of contract.
Contracts among shareholders that limit the exercise of voting rights are effective only between the parties and do not have countervailing power against the company. Even if Honorary Chairman Kim Nam-ho violates the contract and exercises voting rights for the shares he received as a gift, the act of exercising the voting rights itself remains valid.
However, there may be liability for breaches of contract between the parties. Although the exact contents of the contract are unknown, it appears that Kim took into account such clauses when not exercising his voting rights for an extended period.
Nonetheless, the 20-year restriction on voting rights is viewed as extraordinary by the legal community. Jung Byung-won, a representative attorney at One & Partners, said, "Limiting the exercise of voting rights for 20 years is excessively lengthy. There may be a possibility that the court could determine such a contract among shareholders as invalid, viewing it as hollowing out shareholder rights."
A governance expert stated, "In the United States, where the trust system is developed, if the beneficiaries are too young or unable to make rational judgments, ownership of shares can be transferred to a trustee for a specific period, with the trustee exercising the voting rights. This means that the owner of the shares and the one exercising the voting rights are different. In Korea, public welfare foundations have played this role for a long time."