South Korean conglomerate Hyosung Group will transform into a holding company structure to enhance management efficiency and strengthen owner family’s control.
Hyosung Group - the country’s 25th largest conglomerate by asset - held a board of directors meeting on Wednesday and decided to convert itself into a holding company. The plan comes four months after the group officially announced to seek transformation in September.
Under the new structure, holding company Hyosung Corporation will be in charge of managing shares and investment of four operating subsidiaries - Hyosung TNC (textile and trading), Hyosung Heavy Industries (shipbuilding and construction), Hyosung Advanced Materials (industrial materials), and Hyosung Chemical.
So far, Hyosung Group’s broad range of businesses from textile to industrial materials has been managed by a single company.
The reorganization also will enable owner family members including Chairman Cho Hyun-joon and his younger brother and President Cho Hyun-sang to have stronger grip over businesses. The older Cho will be able to secure more shares in Hyosung Corporation by investing shares of operational units in the holding company.
As of end of September, last year, Hyosung Group’s Honorary Chairman Cho Suck-rai holds 10.18 percent stake in the company, Chairman Cho 14.27 percent and his younger brother 12.21 percent. Conglomerate insiders expect the upcoming transition will solidify third generation management.
By Yoon Jin-ho and Lee Eun-joo
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