Succession Completed with Kim Seung-yeon's Bold Decision... Hanwha's Third-Generation Owner Era 'In Full Bloom'

Half of Hanwha Corporation Shares Gifted Amid Succession Controversy
Vice Chairman Kim Dongkwan Completes Succession Ceremony

Seung-yeon Kim, chairman of Hanwha Group, has effectively completed the management succession by gifting half of his shares in Hanwha Corporation to his three sons. Inside and outside the group, this move is seen as a decisive step by Chairman Kim amid ongoing controversies surrounding the succession.

Hanwha announced on the 31st that Chairman Kim Seung-yeon gifted 4.86%, 3.23%, and 3.23% of his shares in Hanwha Corporation to Vice Chairman Dong-kwan Kim, President Dong-won Kim of Hanwha Life Insurance, and Vice President Dong-seon Kim of Hanwha Hotels & Resorts, respectively. After the gift, the shareholding structure of Hanwha Corporation, the group's holding company, was reorganized as follows: Hanwha Energy 22.16%, Chairman Kim Seung-yeon 11.33%, Vice Chairman Dong-kwan Kim 9.77%, President Dong-won Kim 5.37%, and Vice President Dong-seon Kim 5.37%.

Kim Dong-kwan, Vice Chairman of Hanwha Group. Photo by Hanwha

With this gift, the combined shareholding of the three sons, including Vice Chairman Dong-kwan Kim, reached 20.52%. The largest shareholder of Hanwha Corporation is Hanwha Energy with 22.16%. However, considering that the three brothers collectively own 100% of Hanwha Energy (Vice Chairman Dong-kwan Kim 50%, President Dong-won Kim 25%, Vice President Dong-seon Kim 25%), their direct and indirect shareholding in Hanwha Corporation amounts to 42.6%.

Until now, the management succession within Hanwha Group has centered around the eldest son, Vice Chairman Dong-kwan Kim. Last month, Hanwha Aerospace, where Vice Chairman Kim serves as head of the strategy division, decided to purchase a 7.3% stake in Hanwha Ocean for 1.3 trillion won, a move seen as strengthening Vice Chairman Kim’s position within the group.

However, the succession process faced backlash when Hanwha Aerospace executed a paid-in capital increase of 3.6 trillion won?the largest in the history of the domestic capital market?just one week after acquiring the Hanwha Ocean stake, citing investment reasons. The market criticized this decision as prioritizing the interests of the controlling family over those of all shareholders.

Amidst mounting shareholder criticism, Vice Chairman Kim emphasized "responsible management" and purchased approximately 3 billion won worth of Hanwha Aerospace shares. Nevertheless, the controversy did not subside, and ultimately, Chairman Kim chose to take a "direct breakthrough" by gifting shares to finalize the group’s succession. The company also explained on the day, "Chairman Kim decided to gift shares to swiftly resolve unnecessary controversies and misunderstandings related to management succession and to focus on the core business."

Kim Seung-yeon, Chairman of Hanwha Group. Photo by Hanwha

Inside and outside the group, this gift is interpreted as an effort to separate Hanwha Aerospace’s capital increase and the acquisition of Hanwha Ocean shares from the succession issue. Hanwha stated, "With the completion of succession through this share gift, unfounded speculation and distortion linking the urgent and critical large-scale overseas investment purpose of Hanwha Aerospace’s capital increase to succession will be dispelled."

Chairman Kim is expected to maintain his position as chairman of Hanwha Group after the share gift, continuing to provide management advice and support for global business. Vice Chairman Kim is regarded as having completed the succession ceremony without additional share purchases.

Combining the half of Hanwha Corporation shares held by Hanwha Energy with the 9.77% held by Vice Chairman Kim amounts to 20.85%, which is roughly equivalent to the combined shares of President Dong-won Kim and Vice President Dong-seon Kim. If the shares of President Dong-won Kim and Vice President Dong-seon Kim are divided from Hanwha Energy’s stake, they amount to 10.91%. Currently, the three brothers’ roles are divided with eldest son Vice Chairman Kim handling the group’s core businesses, second son President Kim overseeing finance sectors such as life insurance and securities, and youngest son Vice President Dong-seon Kim managing leisure and distribution sectors.

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