New OCI chairman grapples with continued controversy

By Park Jae-hyuk

OCI Holdings kicked off its operation on Tuesday with the appointment of its new chairman, amid multiple controversies surrounding him and the company.

The polysilicon producer for solar power generation said that it finished spinning off OCI Holdings, which will transform into a holding firm for investments by the end of this year, and a new subsidiary named OCI, which will specialize in chemicals.

OCI Vice Chairman Lee Woo-hyun, the company founder's grandson, became the first chairman of OCI Holdings, with the aim of seeking new growth engines for its sustainable development.

However, the chairman was recently found to be a U.S. national without Korean citizenship, when the Fair Trade Commission (FTC) designated him once again as the head of OCI Group, which actually controls the affiliates.

Born in the U.S., Lee had maintained both Korean and U.S. citizenship until he lost his Korean citizenship in 2000. However, he did not notify the Korean court of his loss of Korean citizenship until 2019. As a result, the FTC was not aware of his foreign nationality when designating him as the head of OCI Group in 2018.

Given that Korea has yet to have any rules on designating foreign heads of Korean conglomerates, the OCI Holdings chairman sparked a controversy. The FTC was also criticized for not designating Coupang founder Bom Kim, who is also a U.S. national, as the head of the e-commerce firm again this time.

“OCI differs from Coupang, as relatives of its head have participated in its management,” FTC Chairman Han Ki-jung said. “OCI did not have any intention to change its leader.”

OCI Group is also facing FTC sanctions over unfair internal transactions between SGC Energy and SGC Solutions, which are under the control of SGC Energy Chairman Lee Bok-young, the OCI Holdings chairman's uncle.

The antitrust regulator reportedly carried out an investigation last year into an allegation that SGC Energy offered preferential treatment for SGC Solutions to win a bid to supply bituminous coal to SGC Energy.

Although the OCI Holdings chairman does not hold shares in SGC Energy and SGC Solutions, the two companies are considered to belong to OCI Group. The chairman can therefore be subject to FTC sanctions, which will likely be imposed in the second half of this year.

“SGC's management is independent of our management,” an OCI spokesperson said.

Amid the controversy, the Korea Exchange will resume the trading of stocks of OCI Holdings and OCI on the KOSPI market on May 29.