[Invest&Law] Before Honorary Chairman Jo Seok-rae's Passing, "If Jo Hyun-moon Fully Pays Inheritance Tax, Divide the Property"

Former Hyosung Vice President Cho Hyun-moon is attending a press conference on inheritance-related statements held at SparkPlus in Gangnam-gu, Seoul, on the morning of the 5th. [Image source=Yonhap News]

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In March, the late Jo Seok-rae, Honorary Chairman of the Hyosung Group, who passed away, announced that he would bequeath his inheritance to his second son, former Hyosung Vice President Jo Hyun-moon, on the condition that Jo prepay the inheritance and gift taxes. The procedure was clearly set so that the inheritance could only proceed after Jo Hyun-moon paid the taxes on the estate he was to inherit.

Meanwhile, on the 5th, former Vice President Jo Hyun-moon held a press conference and declared, “I will establish a public interest foundation and donate the entire inherited estate from my late father back to society.”

According to a comprehensive report by Legal News, Honorary Chairman Jo Seok-rae stipulated in his will that Jo Hyun-moon must pay all inheritance and gift taxes related to the estate he would inherit. It is also reported that the will included a condition that the will should be executed only after Jo Hyun-moon pays the inheritance tax first. Additionally, the will contained provisions requiring Jo Hyun-moon to cooperate with co-heirs in procedures such as filing inheritance tax returns.

The will also included measures to prepare for potential complications if Jo Hyun-moon violates these conditions, such as delays in the tax payment process. If additional taxes or penalties are imposed on the inheritance tax, Jo Hyun-moon is to bear the full amount of such penalties.

At the press conference, Jo Hyun-moon stated his intention to establish a public interest foundation and donate the entire inherited estate to society. He added, “By not being greedy for the inheritance and contributing the entire amount to the foundation, I want to set a precedent for the nation and society,” and expressed his belief that his elder brother Jo Hyun-joon, Chairman of Hyosung, and younger brother Jo Hyun-sang, Vice Chairman, as co-heirs, would cooperate in establishing the foundation.

Jo’s representative explained, “(The will) contains various conditions regarding the inheritance process, so there are still steps to resolve those issues first.”

Meanwhile, it is known that the late Honorary Chairman Jo Seok-rae left a wish regarding group management that “Jo Hyun-joon and Jo Hyun-sang should split the Hyosung Group and manage independently.” He entrusted the group management only to the two brothers, Chairman Jo Hyun-joon and Vice Chairman Jo Hyun-sang, excluding Jo Hyun-moon. This contrasts with Jo Hyun-moon’s mention of “independent management by the three brothers” in relation to their father’s will.

On the day, Jo Hyun-moon said, “Since Chairman Jo Hyun-joon and Vice Chairman Jo Hyun-sang are already proceeding with the separation of affiliates, I believe that not being involved as a related party in Hyosung Group anymore and the independent management by the three brothers is also in line with our father’s will.”

As Honorary Chairman Jo wished for group management to be continued by eldest son Chairman Jo Hyun-joon and third son Vice Chairman Jo Hyun-sang, it is known that they were left with more shares in affiliates such as Hyosung TNC and Hyosung Heavy Industries. A significant portion of the estate was also left to his wife, Mrs. Song Gwang-ja.

Legal News Reporters Lim Hyun-kyung, Hong Yoon-ji

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