Chaebol is a unique form of business that exists only in Korea. In short, it can be said to be a family-owned conglomerate. There are many chaebols in Korea such as  Samsung, Hyundai, and SK.  Family disputes in Chaebols such as management rights are not uncommon. LG Group has been famous as the only company that has not had family disputes since its foundation. However, the inheritance dispute resurfaced in family now draws the public attention. 

It has been five years since ex-CEO Koo Bon-Moo died.  LG regards it as emergency state as igniting the possibility of dispute on management rights between siblings  not just an inheritance dispute.

According to LG on the 10th, The lawsuit against CEO Koo Kwang-Mo was recently filed by Kim Young-sik(his mother),  Koo Yeon-kyung,  and Koo Yeon-soo(his sisters).

The complaint was reportedly filed to the Seoul Western District Court on late February. The Korean Civil Act(KCA) article 999 defines about the Claim for Recovery of Inheritance. According to KCA art. 999 clause 2, the Claim for Recovery of Inheritance shall lapse at the expiration of three years from the date he comes to know the infringement, or ten years from the date the right of inheritance is infringed.

Mrs. Kim, Koo Yeon-kyung, and Koo Yeon-soo argue that the legal inheritance ratio should be followed because there was no will from ex-chairman Koo related to inheritance. Cho Young-wook, a lawyer at the law firm Logos, said, "The complaint is not to dispute management rights, but rather to correct procedural problems in the inheritance process for family harmony."

The CEO Koo Kwang-Mo is the biological son of Koo Bon-Neung(HeeSung Group of CEO), the younger brother of ex-CEO Koo Bon-Moo. Koo Kwang-mo became Koo Bon-moo's adopted son and became successor to the LG in 2004 to continue the LG family tradition of the eldest son's succession principle after Koo Won-mo, the only son of president Koo Bon-moo, died in a car accident.

Mrs. Kim is the spouse of ex-CEO Koo Bon-moo, Koo Yeon-kyung is the eldest daughter of Mr.Koo, and Koo Yeon-soo is the second daughter.  Mrs.Koo Yeon-kyung has Yoon Kwan, CEO of Blue Run Ventures, as her husband. Blue Run Ventures is a global private equity fund operator based in Silicon Valley, USA.

LG explained that the legacy of Koo Bon-Moo, who died in May 2018, is worth a total of 2 trillion won, including 11.28% of LG shares. The heirs, Koo Kwang-Mo, Kim Young-sik, Koo Yeon-kyung, and Koo Yeon-soo, split the inheritance in November of that year through consultation.

Koo Kwang-Mo received management-related assets such as LG stocks, while Kim Young-Sik and his two younger sisters received 500 billion won worth of assets including some of LG stocks and financial investment products, real estate, and art.

In particular, LG explained that Koo Kwang-Mo, who has to inherit all LG shares, agreed to inherit 2.01% of LG shares (about 330 billion won at the time) and 0.51% (about 83 billion won at the time), respectively, at the request of three other heirs.

Founded in 1947, LG has partnered with the Huh family since the beginning of its business and has many descendants, so it has maintained a family custom not to argue over property in the family or company, but this lawsuit  has broken it.

LG said in a statement on the day, "There have been several family discussions on the inheritance rate for five months since ex-CEO Koo's death," adding, "According to the agreement, the inheritance was legally completed four years ago and the exclusion period has already passed three years." However, the Bar believes that even if the inheritance has been completed for more than four years, it is possible to file a lawsuit in principle if there was a reason for infringement of inheritance rights that was not recognized at the time of the agreement.

"It is unacceptable to shake LG's tradition and management rights by demanding property division," LG Group emphasized. "LG has inherited management rights with the mutual understanding and consistent principles and traditions since its foundation, and it is well known that there has been no dispute over management rights as well as property for 75 years."