Samhwa Paint has entered a management succession phase following the death of Chair Kim Jang-yeon. Although Vice President Kim Hyun-jung (41), Kim's daughter, is widely expected to take over management, her current holdings of company equity are minimal, making future funding for equity inheritance and verification of her capabilities the biggest variables.
Some say a management control dispute is possible, as the family of the late former Chair Yoon Hee-jung, a co-founder of Samhwa Paint who was previously excluded from management, still holds a significant portion of the company's equity.
Kim died on the 16th at 69. The cause of death was reported as acute sepsis. The second son of the late former Chair Kim Bok-gyu, a co-founder of Samhwa Paint, he was a second-generation owner-executive who led Samhwa Paint's growth after becoming CEO in 1994. Samhwa Paint posted sales of 628.3 billion won and operating profit of 18.9 billion won last year.
Currently, Vice President Kim Hyun-jung, the eldest daughter of Kim, is involved in company management. Kim became an inside director in Mar., opening what is called the "third-generation owner management" era, but a full-fledged equity succession has not yet taken place.
After joining Samhwa Paint in 2019, Kim handled overseas institutional sector strategy, then became head of management support (executive director) in 2023, taking on the role of chief financial officer (CFO). She is an accounting and legal expert with certified public accountant (CPA) and attorney qualifications. She was promoted to vice president last year.
As of the third quarter, Chair Kim Jang-yeon was the largest shareholder with 22.76% of Samhwa Paint's equity. In contrast, Vice President Kim holds 3.04%. Kim's younger brother, Kim Jung-sik, has no company equity, and Kim's older sister, Kim Gwi-yeon, holds 1.50%. Analysts say that to maintain a stable third-generation owner system at Samhwa Paint, it is inevitable for Vice President Kim to secure additional equity.
A corporate governance consultant said, "Whether the equity Kim Jang-yeon held during life will be inherited, how it will be inherited, and how to fund the inheritance tax will be key to the succession," adding, "It is more important than anything that Vice President Kim secure equity above a certain level to ensure management stability."
The person added, "Along with the equity issue, Vice President Kim should clearly present a mid- to long-term management vision," noting, "Market verification of whether she can substantively lead Samhwa Paint's growth is likely to be an important variable in the succession framework."
Some also raise the possibility of a management control dispute with the family of the late former Chair Yoon Hee-jung, who co-founded Samhwa Paint. Since Samhwa Paint was co-founded in 1946 by former Chairs Kim Bok-gyu and Yoon Hee-jung, the two families maintained a co-management structure. However, during the shift to second-generation owner management, the company experienced a management control dispute in 2008, after which Yoon's family stepped back from the front lines of management.
Still, Yoon's sons, Yoon Seok-jae and Yoon Seok-cheon, currently hold 6.90% and 5.52% of Samhwa Paint's equity, respectively, remaining a potential variable in the equity structure.
A business community source said, "Given that the children of the Yoon Hee-jung family still hold meaningful equity, there is a potential factor for a management control dispute," adding, "For now there are no clear signs of conflict, but if Vice President Kim struggles to secure equity or fails to prove leadership through company performance, it will not be easy to gain the trust of the market and shareholders."