The son and heir of South Korean semiconductor materials maker Soulbrain has died in an automobile accident last month, TheElec has learned.
Seok-Ho Chung, born in 1986, was the son of chairman and founder Jiwan Chung. He graduated from Pennsylvania State University before joining Soulbrain. He worked in various affiliates of the business group. He was named executive director in 2018 and was taking an active part in the management of the business group.
Soulbrain, which specializes in materials used in the etching process in semiconductor production, is considered a major semiconductor materials firm in South Korea alongside Dongjin Semichem. Both companies are leading stocks on KOSDAQ, South Korea's main bourse.
The company gained attention last year in July for its ability to produce high-purity hydrogen fluoride after Japan imposed tighter control on the material for exports to South Korea.
SUCCESSION PLAN UP IN THE AIR
There was also high interest in Soulbrain’s succession plans.
On July 1, Soulbrain divided the company into a holding company and a business company, as announced earlier. Soulbrain Holdings will be the surviving corporation and Soulbrain the spin-off that will continue its previous businesses. Soulbrain Holdings didn’t name the younger Chung as a majority shareholders in its filings to local financial authorities due to his death.
People familiar with the matter said the company was split as part of its succession plan. Splitting the flagship company into a holding company and subsidiaries is convenient for succession as the heir only needs stakes at the holding company to increase his or her control over the business group.
It also allows the designated successor to secure the cash needed to buy more shares of the holding company by fostering a non-listed affiliate through internal transactions with other affiliates. The non-listed affiliate will provide the cash to the heir-apparent from these transactions.
A company called Materials Park was one such affiliate of Soulbrain, which was 100% owned by the deceased Chung and his sister. The issue has caused controversies from investors before.
However, the death of Seok-Ho has put the company’s succession plan in doubt, people familiar with matter said. They said the Soulbrain founder may sell the company if he loses interest in continuing management duties. Ten years ago, a large German chemical corporation has offered to buy Soulbrain, but the South Korean company refused then.
A Soulbrain spokesperson declined to comment on the matter. Any announcement related to the news will be shown in its filings to local financial authorities, they added.