[News Space=Reporter seungwon lee] While Acting President and Prime Minister Han Duck-soo is expected to request reconsideration (veto) of the amendment to the Commercial Act at the Cabinet meeting on the 1st, attention is focused on the fact that Lee Jae-myung, the leader of the Democratic Party of Korea, mentioned the controversy over the succession of management rights at Hanwha Group.

Lee Jae-myung, the leader of the Democratic Party of Korea, criticized the acting chairman on his Facebook page on the 31st, saying, “Are you sure you’re going to use your veto power when our capital market is seething with distrust and frustration?”

The representative explained, “Recently, when a listed company announced a paid-in capital increase of 3.6 trillion won, the company’s stock price fell 13% in one day, causing many retail investors to suffer huge losses.” He continued, “On the same day, the parent company’s stock price also fell over 12%. However, today, news came that the head of a certain conglomerate was giving shares of the parent company with a falling stock price to his children.”

The case cited by Representative Lee Jae-myung specifically points out the succession of management rights at Hanwha Group.

Hanwha Aerospace announced on March 20 that it would conduct a paid-in capital increase of 3.6 trillion won, the largest in the history of the domestic capital market, and its stock price plummeted thereafter. On the 31st, Hanwha Group Chairman Kim Seung-yeon completed the transfer of management rights by donating half of his shares in Hanwha Corporation to his three sons.

The representative explained, “Since stock prices affect gift tax, there is a high possibility that gift tax will be reduced due to the lower stock price, and there is even speculation that the money that the listed company recently paid to its children’s company in exchange for selling shares will become a source of gift tax.”

He continued, “This is not an uncommon occurrence in our capital market,” and criticized, “I have nothing to say to shareholders who criticize us for treating the capital market like an ATM.”

The representative asked, “I heard that the acting chairman will decide whether to exercise his veto on the amendment to the Commercial Act. Will he still exercise his veto when our capital market is seething with distrust and frustration?”

Meanwhile, Hanwha Group Chairman Kim Seung-yeon donated 11.32% of his 22.65% stake in Hanwha Corporation to his three sons.

Hanwha Corporation announced on the 31st that Chairman Kim Seung-yeon had donated 4.86%, 3.23%, and 3.23% of Hanwha Corporation shares held by Chairman Kim Seung-yeon to Vice Chairman Kim Dong-kwan, President Kim Dong-won, and Vice President Kim Dong-sun, respectively.

After the donation, the stake of Hanwha Group's holding company, Hanwha Energy, is 22.16%, Chairman Kim Seung-yeon 11.33%, Vice Chairman Kim Dong-kwan 9.77%, President Kim Dong-won 5.37%, and Vice President Kim Dong-sun 5.37%.

The three sons own 100% of Hanwha Energy, so with this gift of shares, their stake in Hanwha Corporation will increase to 42.67%, completing the transfer of management rights.