Kolmar's owner family dispute escalates into management conflict

Kolmar Korea Chairman Yoon Dong-han speaks during a media conference at the firm's R&D center in Seoul, Aug. 11, 2019. Korea Times photo by Bae Woo-han

A management rights feud among siblings at Kolmar Group has escalated into a legal battle between father and son, according to industry officials and legal sources Wednesday.

Chairman Yoon Dong-han, who founded the leading cosmetics manufacturer Kolmar Korea in 1990, filed a lawsuit against his eldest son, Kolmar Holdings Vice Chairman Yoon Sang-hyun. The lawsuit was filed with the Seoul Central District Court on May 30, according to the group.

In the suit, Yoon demanded the return of 2.3 million shares in the holding company — now totaling 4.6 million — which he had gifted to his son in 2019.

Kolmar Holdings Vice Chairman Yoon Sang-hyun

The dispute dates back to 2018, when the chairman finalized a succession plan through a three-way agreement: his son, Sang-hyun, would take over Kolmar Holdings and Kolmar Korea, while his daughter, Yea-won, would lead Kolmar BNH.

Based on that agreement, Yoon gifted 2.3 million Kolmar Holdings shares to his son in December 2019 under a conditional arrangement.

The stake later doubled to 4.6 million shares through a bonus issue, making Sang-hyun the largest shareholder with a 31.75 percent stake, while the chairman held 5.59 percent and his daughter had 7.6 percent.

The father's lawsuit was triggered by a conflict between his son and daughter over control of health supplement maker Kolmar BNH.

Amid Kolmar BNH's continued earnings slump and falling stock price since late last year, Sang-hyun began pushing for a leadership shake-up and boardroom restructuring, citing mounting dissatisfaction among minority shareholders.

In response, Yea-won protested, arguing that the holding company was undermining the subsidiary’s management independence.

Kolmar BNH CEO Yoon Yea-won

As the sibling rivalry continued to escalate, the father took the drastic step of pursuing legal action against his son, which industry observers interpreted as a strong warning.

The chairman reportedly views his son as having broken the three-party succession agreement and now seeks to reclaim the Kolmar Holdings shares he gifted under that condition.

The chairman's legal representative claimed that Sang-hyun abused his position as the largest shareholder by unilaterally altering the agreed-upon succession structure.

"Had Chairman Yoon known of such behavior, he would not have gifted the shares," the lawyer said.

Kolmar Korea added that the chairman’s move reflects his determination to protect the group’s founding principles and management order built over 35 years.

News of the management feud sent related shares soaring that day.

Kolmar Holdings shares rose 29.99 percent to close at 15,950 won ($12), while the KOSPI increased by 21.89 points, or 0.74 percent, to 2,972.19.