The Korean Tire Family Sister's Counterattack... Petition for 'Chairman Cho Yang-rae's Adult Guardianship Commencement Trial'

Chairman Jo Hee-kyung Applies to Seoul Family District Court
"Need to Determine if Voluntary Consent is Given in a Healthy Condition"

[Asia Economy Reporter Kiho Sung] Korea Technology Group (formerly Korea Tire Worldwide) family’s eldest daughter, Cho Hee-kyung, chairperson of the Korea Tire Sharing Foundation, has petitioned the court to appoint a guardian supervisor for her father, Chairman Cho Yang-rae. This move comes after concerns about a sibling dispute over management rights intensified following the second son, Cho Hyun-beom, overtaking the eldest son, Cho Hyun-sik, to become the largest shareholder.

On the 30th, Cho’s side filed a 'petition to commence adult guardianship' at the Seoul Family Court and stated in a press release, "We requested the commencement of adult guardianship to objectively determine whether Chairman Cho is capable of making voluntary decisions in a healthy state," adding, "Through an objective judgment, we aim to uphold the chairman’s usual beliefs and prevent potential problems that may arise for the family or the company."

The adult guardianship system is designed to appoint a guardian for adults who continuously lack the capacity to manage affairs due to mental limitations caused by illness, disability, or old age. The ward can receive protection and support from the guardian for property management and matters difficult to decide independently in daily life.

Cho’s side explained the petition, saying, "Many people were surprised and bewildered by the sudden decisions that were very different from the beliefs and thoughts Chairman Cho had held. We believe it is time for an objective judgment to determine whether these decisions were made voluntarily by the chairman in a healthy mental state," and added, "We seek an objective judgment to uphold the chairman’s usual beliefs and prevent further problems."

Earlier, Chairman Cho sold all of his 23.59% stake in Korea Technology Group to his second son, Cho, through a block deal (off-hours large-volume sale). Combining his existing shares with his father’s, Cho now holds 42.9%, becoming the largest shareholder. This raised significant concerns in the business community about a potential sibling dispute over management rights. Although the company quickly tried to calm the situation by stating that the existing sibling management structure would remain unchanged, Cho’s opposition to his father’s decision suggests that the 'brothers’ conflict' over management rights is likely to intensify.

Attention is focused on the eldest son, Vice Chairman Cho. If he allies with his sister, Cho Hee-won, who holds a 10.82% stake, to contest the management rights, they could face turmoil similar to the Hanjin family feud. Combining Vice Chairman Cho’s 19.32% stake with his sister’s 10.82% results in 30.14%. Adding the 7.74% stake held by the National Pension Service, which could play a 'casting vote' role, brings the total to 37.88%. Including minority shareholders, they could potentially secure a majority stake.

The outcome of Cho’s trial is also crucial. He was indicted on charges of breach of trust and embezzlement and was sentenced in the first trial on April 1 to three years in prison with a four-year probation and a fine of 615 million won. According to the Act on the Aggravated Punishment of Specific Economic Crimes, executives convicted of embezzlement or breach of trust involving over 500 million won cannot return to company management. Even if the sentence is lighter, if detention is ordered, management activities will be severely restricted. The trial’s outcome will also influence the stance of the National Pension Service, which holds the casting vote.

This content was produced with the assistance of AI translation services.