Two sons of the Kumho Group founder are likely start a lengthy legal battle over a merger between Kumho Terminal and Kumho & Co., a special purpose company set up by the elder brother to bring his empire back under his control.
Kumho Petrochemical, run by younger brother Park Chan-koo, has recently sent an official request to Kumho Terminal to stop the merger with Kumho & Co., threatening to take legal action if it does not drop the case.
Calling the deal a serious dereliction of duty, Kumho Petrochemical claimed that Kumho Terminal, if merged with Kumho & Co., would be used to repay the 627 billion won in debt owed by the special purpose company.
The younger Park claims that his older brother has already borrowed 347 billion won to acquire Kumho Industrial last year and he needs an additional loan of 280 billion won to secure the controlling stake in Kumho Terminal. The plan would hurt the financial soundness of Kumho Terminal, regarded as a cash cow firm, which has more than 300 billion won in cashable assets and generates a yearly profit of approximately 10 billion won, he claimed.
Kumho Petrochemical is the second-largest shareholder of Asiana Airlines, which sold its entire stake in Kumho Terminal to Kumho & Co.
Asiana Airlines, the country’s second-largest carrier, meanwhile, said there were no legal problems with the merger.
The case is a fresh round in the fraternal battle that was formally ended by the Supreme Court last year. The top court said in its ruling that the eight units controlled by Kumho Petrochemical cannot be seen as affiliates of Kumho Asiana Group, legally cutting the business link between the companies run by the two brothers.
By Cho Chung-un (
christory@heraldcorp.com)