Affiliates linked in tangled web of ownership structure
By Kim Da-ye
The structure of Semo Group is a tangled web of dozens of affiliates, which own each other ultimately controlled by individuals ― former Chairman Yoo Byung-eun's two sons and seven of his friends.
The prosecution has summoned and questioned several of them while the second son and two daughters have not responded. Both were ordered to turn themselves in by May 2.
Understanding the nature of the group's structure became increasingly important as it is closely linked to any future compensation paid to the victims of the sunken ferry Sewol.
Because Chonghaejin Marine, the operator of the Sewol, is heavily in debt, the government will have to compensate the victims and try to recuperate the costs from the real owners of Chonghaejin Marine with actual wealth.
Yoo, for example, is not a major shareholder of any of the key affiliates of Chonghaejin Marine.
The investigation will also help find out how the Sewol operator came under financial trouble and ended up buying an 18-year-old ferry from Japan with borrowed money and built a dangerously excessive extension to squeezing every penny out of the investment.
Semo Group's structure is complicated, but has a pattern. One affiliate is owned by another, which is eventually controlled by Yoo's two sons and his right-hand men and women.
Chonhaeji, a shipbuilding affiliate, is the biggest shareholder of Chonghaejin Marine with a 39.4 percent stake. Kim Han-sik, its president and long-term executive at the group, owns an 11.6 percent share.
The major shareholder of Chonhaeji is I-One-I Holdings that controls 42.81 percent of the firm. Yoo's two sons ― the elder Dae-gyun and Hyeok-gi ― hold a 19.44 percent stake each on I-One-I Holdings.
I-One-I is a de facto holding company of the Semo Group, and the two sons control the whole group with their stake in I-One-I. It also controls 44.82 percent of Ahae, which holds a 10.18 percent stake in Ahae Press France that publishes Yoo's photography works.
Kim Hye-gyung has a 6.29 percent share in I-One-I. Kim, the president of another affiliate Hankook Pharmaceutical, is known as a former secretary of Yoo. She has a strong presence throughout the group after the two sons. The prosecution demanded her to return to Korea from abroad by April 29, but she did not respond.
Another large shareholder of Chonhaeji is Dapanda, a distributer of cosmetics and food supplements, with 18.21 percent share.
Dapanda is mostly controlled by those closest to Yoo ― 32 percent by Dae-gyun, 24.4 percent by Kim Hye-gyung, 20 percent by Kim Pil-bae and 10 percent by Song Gook-bin, the current CEO of the company. Kim Pil-bae is a former CEO of Dapanda, I-One-I Holdings and Moonjin Media. Both Song and Kim are among those dubbed by the local media as "seven closest to Yoo Byung-eun."