Former Ourhome Vice Chairman Koo Bon-sung demands $234 mn in dividends

2023.03.24 10:20:03 | 2023.03.24 10:21:30

Ourhome headquarters in Seoul [Photo by Lee Chung-woo]이미지 확대

Ourhome headquarters in Seoul [Photo by Lee Chung-woo]



Koo Bon-sung, former chief executive officer and vice chairman of South Korean food company Ourhome Co., has demanded dividends worth up to 300 billion won ($234 million) from the company amid a years-long sibling feud over management control.

According to multiple sources from the retail industry on Thursday, the board of Ourhome on Monday adopted a shareholder proposal made by Koo that demands 296.6 billion won in dividends. Under the current law, a proposal of a shareholder with over 3 percent stake in an unlisted company like Ourhome must be included in the agenda unless it qualifies for an exception or ordinance.

Koo, the eldest son of the late Ourhome Chairman Koo Ja-hak, founder of Ourhome and the third son of the LG Group founder, owns a 38.56 percent stake in the food company. If his demand is approved at the shareholders meeting on April 4, Koo will take 114.4 billion won in dividends.

The amount of dividends Koo has demanded is 11.6 times larger than Ourhome’s net profit of 25.5 billion won last year. It is also more than the company’s cashable assets of 224 billion won as of 2021. Cashable assets refer to the amount of reserves set aside by a company to repay debt and for essential operation expenses.

Ourhome will have to finance the dividend payment for Koo by issuing bonds or new shares if the board approves his request. Koo Ji-eun, vice chairman of Ourhome and the youngest sister of the former vice chairman, has proposed a different agenda of paying 3 billion won in dividends.

Ji-eun and Koo’s second sister Koo Myung-jin have been at odds with their brother. Ji-eun and Myung-jin have a combined 40.27 percent stake in Ourhome, slightly higher than what Koo owns, but not enough to decide on the dividends in a shareholder vote.

Koo Ji-eun, vice chairman of Ourhome and the youngest sister of the former vice chairman, and Koo Bon-sung, former chief executive officer and vice chairman of Ourhome [Photos provided by Ourhome]이미지 확대

Koo Ji-eun, vice chairman of Ourhome and the youngest sister of the former vice chairman, and Koo Bon-sung, former chief executive officer and vice chairman of Ourhome [Photos provided by Ourhome]



The result is likely to be determined by the decision of their elder sister Koo Mi-hyun with a 19.28 percent stake.

Mi-hyun has been inconsistent in her moves in the sibling feud. She sided with her brother in a management dispute with Ji-eun in 2017 but stood up for her sisters in 2021.

It isn’t the first time Koo has demanded a high dividend. Ourhome’s dividend payout ratio, which stood at around 10 percent, rose to 11.5 percent in 2016 in the first year Koo took office and continued to rise to 14 percent in 2017, 34 percent in 2018, and 96 percent in 2019. Koo had also demanded a dividend of 100 billion won in March last year when Ourhome posted 4.8 billion won in net profit in 2021.

Koo’s request, however, was voted down at the shareholders meeting.

Industry insiders note that Koo’s request comes in resentment over the failed attempt to sell his shares in the company.

In February last year, Koo sought the sales of his shares, saying that he will step down from the management. The sales, however, faced a setback due to differences in view with his sister Mi-hyun.

The sibling feud at Ourhome goes back to 2017. Koo became vice chairman and chief executive officer of the company. His three sisters, however, ousted him at a shareholders meeting in 2021 after the court sentenced him to 2 years of probation and 6 months in prison in the first trial over a driving scandal.

Ji-eun became the CEO that year and has been seeking to stabilize management by forming the board with friendly forces.

By Jin Young-hwa and Choi Jieun

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