This story is part of Forbes’ coverage of Korea’s Richest 2018. See the full list here.
The tragic death of his son in 2004 left LG Group Chairman Koo Bon-Moo with two daughters but without a male heir. So Koo legally adopted Koo Kwang-Mo, then 26, a younger brother’s only son, and groomed him to take over someday. Now, with Bon-Moo’s death from brain cancer last month, Kwang-Mo is expected to become the new LG chairman when the board meets June 29 . He was elevated to the board of the holding company, LG Corp., after his father died.
Chaebol transitions often lead to fights, but a power struggle seems unlikely at LG. The father, who was 73, owned 11.28% of LG Corp., and his son holds 6.24%, easily enough to guarantee Kwang-Mo’s succession. There’s one complication, however. Another of Bon-Moo’s younger brothers, Bon-Joon, 66, is vice chairman of both LG Corp. and LG Electronics and was put in charge during his brother’s year-long illness. A spokesman says he will continue to “oversee major operations and lead and direct major management meetings.” He owns 7.72% of LG Corp.
Stepping up
Kwang-Mo’s experience is rather limited, so his focus at first will be shareholder relations–keeping stockholders, especially the Koo family, happy. Only 40, he’s expected to grow into the chairman’s job under his uncle’s tutelage. A graduate of the Rochester Institute of Technology in the U.S., he has worked for LG Electronics for 12 years and is vice president of its information-display unit; he’s also a LG Electronics director.
LG is South Korea’s fourth-largest chaebol and generated $160 billion in revenue last year, mostly in chemicals, telecommunications, household products and electronics. “As a younger executive with international experience and a solid technical background, Kwang-Mo may be able to provide the group with the direction and leadership that will be important for the next two decades,” says Hank Morris, a longtime financial-sector analyst in Seoul. LG stands to profit “as batteries make electric vehicles and appliances ever more important.”
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Legacy
Koo Bon-Moo was the grandson of Koo In-Hwoi, who founded Lucky as a chemical company in 1947 and started Goldstar in electronics 11 years later. His son, Koo Ja-Kyung, who is now 93, turned the company over to Bon-Moo in 1995. The first thing Bon-Moo did was change the Lucky Goldstar name to LG. Annual revenue was just $30 billion back then. The group is riding high these days on sales of TV sets, smartphones and washing machines. Although the founder and his heirs avoided the temptation to compete in motor vehicles, LG does have a stake in the industry, making batteries and LED lights. It recently made its costliest acquisition, purchasing ZKW, an Austrian manufacturer of automotive lights, for $1.5 billion.
Bon-Moo was the oldest of the four Koo brothers, and they all made the rich list each year. Last year he ranked 13th; his fortune totaled $2.2 billion as of February. The company hasn’t said how that wealth will be distributed, but Kwang-Mo and his sisters are expected to inherit all or most of the LG shares. He ranked 48th on last year’s list with $720 million but did not make the cutoff this year. The next Koo brother, Bon-Neung, is the one who gave up Kwang-Mo for adoption. He chairs Heesung Group, which Bon-Moo spun off from LG, and is No. 37 this year with $1.15 billion; he owns 3.45% of LG Corp. Bon-Joon, the vice chair, is 45th, at $1 billion, and Bon-Sik, the youngest, is No. 34 at $1.18 billion.
