Hyundai Department Store to Be Managed by Third-Generation Owner

The Hyundai Department Store chain promoted current vice chairman Chung Ji-seon, 35, to the group’s helm yesterday, marking the launch of the third generation of its ownership management system.

The chain’s CEO, Kyung Cheong-ho, 54, is set to take the vacant vice chairman’s office. Assisting the 30-something chairman, Kyung is likely to wield huge influence over the 27th largest corporation in Korea’s private sector.

The chain’s board of directors convened a meeting yesterday and approved a promotion schedule that will become effective January 1, 2008. Under the schedule, 33 officers of the group will get promoted or be assigned to new posts, along with incumbent vice chairman Chung Ji-seon, who is the first son of the group’s honorary chairman Chung Mong-keun, and Kyung Cheong-ho.

The promotion completes the inheritance process of the group’s management from honorary chairman Chung to his son Ji-seon. From February 2003 to June 2006, the former had conveyed 17.1 percent of the shares to the latter over four occasions. For the conveyance, the family paid 170 billion won (approximately, 170 million dollars) in gift taxes.

When new chairman Chung takes office next January, the ownership will enter its third-generational phase. It has been passed down from Hyundai founder Chung Ju-yung to Chung Mong-keun to Chung Ji-seon.

The chain explained in a statement, “Honorary chairman Chung is not in good health, and the chairman office had been empty. As planned, Mr. Chung [Ji-seon] will finally assume the chairmanship. Mr. Chung has supervised our group since the honorary chairman left office in December 2006 due to health problems.”

The new chairman first joined the family business in 1997 and held major posts till January 2003, when he got promoted to vice chairman.

In addition to the new chairman, Kyung’s promotion has drawn public interest as well. Without any family ties, Kyung has earned his way up the corporate ladder. He will be the second man in the group.

Kyung will coordinate differences and business operations among subsidiaries, raising his status in the group higher.

Kyung’s excellent management ability has commanded the trust of major shareholders. He has filled major posts for the group.

jinhup@donga.com