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LG`s 4 Subsidiaries to Separate

Posted September. 30, 2003 22:48,   


LG`s four subsidiaries including LG Cable, LG Nikko Copper, LG Caltex Oil, and Kukdong City Gas will be separated from the group. As a result, the number of LG subsidiaries decline to 47 from 51.

In addition, Koo Ja-hong resigned as LG Electronics Chairman and Vice Chairman Kim Ssang-su replaces him as a new CEO.

LG Corporation, the holding company of the LG Group, announced Tuesday that it will apply for the separation of the four subsidiaries in the Korea Fair Trade Commission (KFTC) at the beginning of October.

LG sold a 5.1-percent of 20-percent LG Energy share, which LG Cable has had, to LG Construction on Aug. 12 in an attempt to seek subsidiary separations, satisfying the requirement of the Fair Trade Law (15 percent of shares or less). Moreover, the group made Chairman Koo give up his position in accordance with the law that banned a senior official at one subsidiary from working at another one.

The four subsidiaries will be managed by the late Koo In-hoe`s descendants including Koo Tae-hoe and Pyoung-hoe. Koo Ja-hong, the first son of the Koo Tae-hoe, is expected to take part in the four companies` management.

The LG Group has been pushing for restructuring since the 1997-1998 financial crisis, focusing on electronics, chemical, and life science through the shift to the holding company system and subsidiary separations.

Chan-Sun Hong hcs@donga.com