Chairman Lee Junho Consolidates Control of NHN... Successor's Stake Decreases?

Chairman Lee’s Private Corporation Acquires Eldest Son’s Stake
Unusual Move: Successor’s Share Decreases, Drawing Attention

Lee Junho, founder and chairman of NHN, is actively utilizing his personal corporations to defend his management rights while providing financial resources to his children. Although internal equity transfers within owner families are typically interpreted as succession moves, attention is being drawn to the fact that the successor’s stake has, in contrast, decreased.

According to the Financial Supervisory Service’s electronic disclosure system on July 16, Chairman Lee purchased 221,000 shares of NHN from his eldest son, Lee Sumin, through JLCPARTNERS—his wholly-owned private corporation—via a block deal on July 14. Previously, on July 6, he had also acquired 750,000 shares of NHN through the same method. As a result of these two transactions this month, JLCPARTNERS increased its holdings in NHN from the previous 8.88% to 12.12%.

Initially, JLCPARTNERS publicly disclosed a plan on June 4 to acquire 500,000 shares of NHN owned by Mr. Lee at 53,300 won per share through a block deal. However, as NHN’s share price declined, the actual transactions were conducted at 34,900 won per share (on July 6) and 38,150 won per share (on July 14). Instead, the total volume traded surged to 971,000 shares.

This series of transactions has further solidified Chairman Lee’s control and management rights over the group. He is also consolidating his stake through another private corporation, JLC. Last year, he directly purchased 2.15 million shares of NHN previously held by JLC via block deal as well, bringing his ownership stake to nearly 30%. In contrast, Mr. Lee Sumin has effectively disposed of almost all of the 1 million NHN shares he held, securing several tens of billions of won in cash. The move, which runs counter to the typical pattern of the successor increasing their stake, raises questions about whether this is truly succession-driven.

Nevertheless, since Mr. Lee Sumin’s shares did not go to a third party but were transferred to JLCPARTNERS, Chairman Lee’s personal company, the family’s control remains intact. The funds secured may also be used for gift tax payments that could arise in the future succession process. Whether Chairman Lee will alter the succession structure, or if the stake will return to Mr. Lee Sumin, remains to be seen.

Meanwhile, in 2016, Chairman Lee donated funds to Mr. Lee Sumin and his second daughter, Lee Surin, which enabled them to purchase 500,000 NHN (then NHN Entertainment) shares each via open-market transactions over 41 separate trading sessions within four months. He paid around 40 billion won in gift taxes at that time, drawing attention by acquiring the shares through official channels. The number of shares Mr. Lee Sumin held doubled to 1 million after NHN executed a 1:1 bonus issue in 2022. The fact that he had been working at NHN since 2021 was then interpreted as the start of management succession. Currently, however, Mr. Lee Sumin is reportedly no longer working at NHN.

This content was produced with the assistance of AI translation services.