[The Editors' Verdict] Ourhome: Blood Divided by Money

Brothers, siblings, and sisters are collectively referred to as "donggi," meaning those who share the energy of their parents. However, they are also rivals in familial conflicts. The first murder in human history appears in the Bible. Cain, the elder son of Adam and Eve, kills his younger brother Abel out of jealousy for God's favor. In the founding myth of Rome, the twin brothers Romulus and Remus united to establish Rome, but Romulus killed Remus over disputes about boundaries and took sole control of the city.

The dark nature of humans involving jealousy and violence among siblings transcends time and geography. Yi Bang-won, son of Joseon’s founder King Taejo Yi Seong-gye, killed his half-brothers Bang-seok and Bang-beon to become King Taejong. Familial conflicts are particularly prominent in Korean companies with strong hereditary tendencies. The power struggles among siblings in Hyundai, Doosan, Kumho, Hyosung, Lotte, and Hanjin were no less fierce than those in royal dynasties, though no weapons were drawn.

Recently, the Ourhome company within the LG family has been a case in point. Ourhome was established in 2000 by Koo Ja-hak, the third son of LG Group founder Koo In-hwoi. It is a privately held company where Koo Ja-hak’s eldest son, former Vice Chairman Koo Bon-sung, holds 38.56% as the largest shareholder, while three sisters?Koo Mi-hyun (19.28%), Koo Myung-jin (19.6%), and Koo Ji-eun (20.67%)?share the remaining shares.

The conflict among siblings at Ourhome dates back to 2016. The youngest, Vice Chairwoman Koo Ji-eun, was the only family member to receive management training starting in 2004 and was promoted to Vice President in 2015 due to her recognized abilities. However, her older brother, former Vice Chairman Koo Bon-sung, invoked LG Group’s eldest-son succession principle and became CEO in June 2016, pushing Koo Ji-eun to a subsidiary CEO position. The following year, Koo Ji-eun called an extraordinary shareholders’ meeting in opposition to Koo Bon-sung, but eldest sister Koo Mi-hyun sided with their brother, resulting in a failure to secure management rights. The situation changed when Koo Bon-sung was indicted on charges of retaliatory driving and, in June last year, was sentenced to six months in prison with a two-year probation. He stepped down as CEO, and the three sisters united to pass a motion to dismiss him. In February, Koo Bon-sung declared through his legal representative that he would no longer participate in management, seemingly ending the power struggle.

However, the fight was not over. Koo Mi-hyun, who had allied with Vice Chairwoman Koo Ji-eun, suddenly sided with former Vice Chairman Koo Bon-sung, who then moved again to oust Koo Ji-eun. Public opinion is not favorable toward Koo Bon-sung, largely due to his high dividend policy, which has drawn sharp criticism. The dividend payout ratio, which hovered around 10%, rose to 11.5% in 2016, his first year as CEO, then to 14% in 2017, 34% in 2018, and 96% in 2019. At that time, Ourhome barely avoided losses with a pre-tax profit of 575 million won. Moreover, Koo Bon-sung is under police investigation for embezzlement and breach of trust involving around 6 billion won. Employees view his actions as self-serving rather than beneficial to the company’s development.

Ourhome’s credibility has collapsed, and dedicated, capable employees are losing motivation and leaving the company due to uncertainty about the future. The labor union has stated it will never tolerate situations that destabilize the company’s management. Ourhome is not a small neighborhood store; it is a comprehensive food company that has maintained its industry-leading position for 30 years through the sacrifice and effort of over 10,000 employees. The saying "money is thicker than blood" comes to mind. The wisdom of the parent managers is urgently needed.

Kwangho Lee, Head of Distribution Economy Department

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