Ourhome 'Sibling War' Ends with Former Vice Chairman Koo Bon-sung's Victory... Koo Ji-eun Steps Down (Summary)

Rejection of Gu Ji-eun's Treasury Stock Purchase Proposal... Failure to Defend Management Rights
Gu Jae-mo, Son of Former Vice Chairman Gu Bon-seong, Appointed as New Director
New CEO to Be Selected at Future Board Meeting... Gu Mi-hyun Considered

The so-called 'Sibling War' over the management rights dispute within the group meal service company Ourhome's owner family has ultimately ended in victory for the eldest son, former Vice Chairman Gu Bonseong. The faction led by Gu Bonseong, who formed an alliance with the eldest daughter Gu Mihyeon and secured a majority stake, blocked the reappointment of the youngest sibling, Vice Chairman Gu Jieun, thereby putting an end to the sibling conflict over company management rights.

Former Ourhome CEO Koo Bon-sung (left) and Ourhome Vice Chairman Koo Ji-eun

On the morning of the 31st, at a closed extraordinary shareholders' meeting held at the headquarters in Magok District, Gangseo-gu, Seoul, the proposal by former Vice Chairman Gu Bonseong's faction to appoint his son, Gu Jaemo, as an inside director was approved. Including Gu Mihyeon, who was appointed at last month's regular shareholders' meeting, and her husband Lee Yeongyeol, the total number of inside directors at Ourhome reached three. However, the proposals to appoint Hwang Gwangil, former head of the Nanjing branch in China, as an inside director, and to appoint Gu Bonseong himself as a non-executive director, both submitted by Gu Bonseong's faction, were rejected.

Additionally, the proposal for Vice Chairman Gu Jieun to purchase Ourhome's treasury shares was rejected. The proposal aimed to buy treasury shares within a limit of 14,019,520 shares (61% of total shares) using the distributable profit of 533.1 billion KRW. Along with the rejection of the treasury share purchase proposal, the reappointment of current inside directors including Gu Jieun was not put forward at the meeting, and with Gu Jieun failing to secure reappointment, her term will expire on the 3rd.

Previously, at the regular shareholders' meeting held on the 17th of last month, eldest daughter Gu Mihyeon passed a shareholder proposal to appoint her husband, former Hanyang University Medical School professor Lee Yeongyeol, as an inside director. In contrast, the proposals to appoint about ten inside directors including Vice Chairman Gu Jieun were all rejected, and the approval for the directors' remuneration limit was also not passed. The extraordinary shareholders' meeting was held to handle the remaining agenda items because only two inside directors, Gu Mihyeon and her husband, were appointed at the regular meeting, while the Commercial Act requires companies with capital exceeding 1 billion KRW to have at least three inside directors.

Ourhome, an unlisted company, currently has over 98% of its shares held by the late Chairman Gu Jahak's one son and three daughters. Former Vice Chairman Gu Bonseong owns 38.56%, youngest sibling Gu Jieun owns 20.67%, eldest daughter Gu Mihyeon owns 19.28%, and second daughter Gu Myeongjin owns 19.6% respectively.

Exterior view of Ourhome Magok Food Research Center.

As a result of the shareholders' meeting, Vice Chairman Gu Jieun will leave the board of directors, three years after becoming CEO in 2021. This shareholders' meeting was effectively her last chance to defend her management rights. In fact, to defend her management rights, Ourhome had been planning to buy Gu Mihyeon's shares, who had previously shown more interest in exercising her property rights than management rights, but despite all-out efforts, she ultimately lost control of management.

With the alliance of eldest son former Vice Chairman Gu Bonseong and eldest daughter Gu Mihyeon winning the management rights dispute, the possibility of Ourhome being sold has increased. According to industry sources, Gu Bonseong is reportedly conducting behind-the-scenes discussions with private equity fund (PEF) managers about selling Ourhome's management rights. As Ourhome is the second-largest group meal service company in Korea and has generated stable profits, domestic and foreign PEF managers as well as domestic food companies are showing strong interest. Previously, in 2022, when Gu Bonseong announced plans to sell his shares, Gu Mihyeon agreed with her brother and attempted a joint sale.

However, some speculate that despite Vice Chairman Gu Jieun losing management rights, legal disputes may continue. The three sisters had signed a 'Joint Sale Agreement' in 2021 to jointly exercise voting rights on director appointments and dividend proposals, so Gu Mihyeon siding with her brother would violate this agreement. The court has previously ruled that the agreement is still valid. Violating the agreement and exercising voting rights independently could result in penalty damages, which industry insiders estimate could reach up to 120 billion KRW.

With Vice Chairman Gu Jieun losing management rights, there are concerns that the food tech business, which was promoted as a future growth engine under Gu Bonseong's leadership, may be hindered. Since Gu Bonseong had been leading investment decisions and business agreements related to food tech, it is unlikely that this management policy will be maintained under the new regime.

Meanwhile, the new CEO to succeed Vice Chairman Gu Jieun has not yet been decided. Ourhome plans to hold another board meeting to appoint a new CEO. Since Gu Mihyeon sent a letter to Gu Jieun's faction the day before expressing her intention to be appointed CEO, there is speculation that Gu Mihyeon may become the next CEO.

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