LG, Approval of Holding Company Split Agenda at General Meeting... Koo Bon-joon's LX Holdings Takes 'First Step'

Passed with 76.6% in favor of division... Official launch in May

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the newly established LG holding company separating from LG Group has passed the final hurdle of the shareholders' meeting, the independent journey of Koo Bon-joon, uncle of LG Group Chairman Koo Kwang-mo, has begun. Ahead of its official launch in May, Koo's 'LX Holdings Co., Ltd.' is expected to accelerate its preparations for establishment, including building an independent and responsible management system.

LG Corp. held its regular shareholders' meeting on the 26th at the LG Twin Towers in Yeouido, Seoul, and approved the division plan, including the company name change. For the division agenda, which requires a special resolution, approval must come from at least one-third of all shares and two-thirds of the shareholders attending the meeting. The attendance rate at the meeting was 89.2%, with 76.6% voting in favor. This comes four months after LG's board resolved in November last year to split four subsidiaries?LG International, Silicon Works, LG Hausys, and LG MMA?from among 13 subsidiaries to establish a new holding company.

Accordingly, LX Holdings, separated from LG, will officially launch on May 1. Until the division date, LX Holdings plans to carry out preparatory work across management areas such as personnel, finance, and strategy to establish an independent and responsible management system.

LG stated that through this division, it will establish an independent and responsible management system, thereby strengthening the holding company's core roles such as subsidiary performance management, business portfolio management, and enhancing transparency in ownership and governance structure. LG will focus its capabilities and resources on electronics, chemicals, and telecommunication services, strengthening growth engines such as batteries, large OLEDs, and automotive components, while LX Holdings will nurture business companies with growth potential as core enterprises to maximize corporate value.

LX Holdings' affiliates have already expressed their determination to expand their business areas by exploring new businesses. LG International, regarded as a core of LX Holdings, passed a resolution at its regular shareholders' meeting on the 24th to add and change its business purposes to include eco-friendly, healthcare, e-commerce, medical testing and analysis, tourism, and lodging industries. Silicon Works, which showed an upward trend by surpassing 1 trillion won in sales for the first time last year, is expected to expand its system semiconductor business. LG Hausys is undergoing structural reorganization to focus on its core interior building materials business by selling off its automotive-related sectors, including the previously loss-making automotive materials division.

Although the new holding company spin-off process from LG was virtually finalized with this shareholders' meeting, the controversy over the company name remains. Korea Land and Geospatial Informatix Corporation (LX), which uses the same name in English, has announced its intention to take legal action such as injunctions and delivered a protest letter signed by its president to LG on the same day. Prior to this, on the 23rd, Korea Land and Geospatial Informatix Corporation sent a certified letter requesting the cessation of trademark use. LG responded by stating, "The trademarks of both companies differ in logo, design, and color, so the possibility of confusion is low," and expressed willingness to continue dialogue.

Meanwhile, at the LG shareholders' meeting, Koo Kwang-mo, LG CEO, was reappointed as an inside director, and Kim Sang-heon, chairman of the National Theater Company, was reappointed as an outside director. Additionally, Lee Soo-young, executive officer of Eco Management Korea Holdings, was newly appointed as an outside director. LG explained, "Lee, who served as CEO of Kolon Eco One Co., an environmental service company, is expected to enhance board diversity and provide insightful advice based on expertise related to ESG." Both Kim and Lee were also appointed as members of the audit committee on the same day.

CEO Koo said, "This year, LG will continue its relentless challenges to respond swiftly to changes, thoroughly manage risks, and advance as a customer-centric company," adding, "Through establishing an ESG management system, we will strive to become a sustainable LG that earns trust and love from diverse stakeholders." LG announced that its 13 listed subsidiaries will soon hold board meetings to establish ESG and internal transaction committees within the board, strengthen the authority and independence of the audit committee, and enhance the role of the outside director nomination committee, accelerating improvements in corporate governance.

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