Park Sam-koo back in Kumho driver’s seat

Conglomerate now shadow of its former self

By Kim Yoo-chul

Park Sam-koo is back in the saddle leading Kumho Asiana.

But the conglomerate is no longer what it was ― one of Korea’s top 10 business groups.

The forced handover of Daewoo Construction and Engineering to creditors and a fight with his brother for the control of the group leaves Park with only a little of the influence he used to wield.

But Park is not ready to give up; rather, he is trying his best to pick up where he left off.

First of all, he is cutting 20 percent of executives as part of a restructuring drive.

His main targets are the group’s key affiliates ― Kumho Tire and Kumho Industrial. Park ordered the termination of the executives, officials directly involved with the matter, told The Korea Times.

``Kumho Tire will lay-off more than 10 percent of its executives, lowering the total to 36,’’ said one official, adding Kumho Industrial has also recently cut its executives by 20 percent.

``That’s mainly due to the continued dismal performances by the two affiliates. Before the lay-offs, the chairman met with 120 executives from the group’s affiliates, to check on the business situation that he was facing,’’ the official said.

A Kumho Asiana spokesman admitted the group is being urged to fire some of its executives because Kumho Tire and Kumho Industrial were under a ``workout program.’’

``Chairman Park is showing his eagerness to control the group completely with the personnel restructuring,’’ said another official familiar with the matter.

The 67-year-old Park and his younger brother Park Chan-koo, the chief executive of Kumho Petrochemical, were in deep trouble after the group made the huge mistake of buying local builder Daewoo Construct & Engineering.

Sam-koo had pushed for the deal, while Chan-koo, the younger brother, strongly opposed it. Kumho Group is seeking to legally separate from Kumho Petrochemical, though officials say Sam-koo is still hoping to derail such a move.

Chan-koo abruptly resigned from the top post for a while. However, he has since returned to top management.

Last year, the government-funded Korea Development Bank or KDB wholly took charge of the group and Seoul prosecutors have already issued an arrest warrant for Chan-koo over the creation of a slush fund by illegally siphoning off company money.

But it’s quite apparent that Park Sam-koo is more than keen to show his management capability by putting the two affiliates back on the right track.

Last month, he sold the entire 10.45 percent of his stake in Kumho Petrochemical, valued at some 400 billion won. Kumho plans to use the money earned from the stock selling to buy new shares of the two affiliates in what analysts believe are plans to revive his influence at Kumho Tire and Kumho Industrial.

``Amidst a chronic slump in the local construction sector, Kumho Industrial urgently needs new cash. Also, the group’s tire-making affiliate is reeling from a rapid deterioration of its corporate soundness, hit by a slump in its overseas businesses,’’ said an official who did not want to be named.

The family feud seen in Kumho Group isn’t the sole one. Most Korean conglomerates have family-run business structures. Therefore disputes over management succession and ownership between children and even grandchildren are endless.