[Edaily Reporter Kim Jeong-yu] Shinsegae Group Chairman Chung Yong-jin (pictured) will take on the role of CEO at #E-Mart and Shinsegae Property. This move demonstrates his determination to personally lead the two core pillars responsible for Shinsegae Group’s present and future. Amid a crisis engulfing the entire Shinsegae Group following the recent Starbucks marketing controversy, Chairman Jeong has stepped forward to champion “responsible management.” All eyes are on whether Chairman Jeong’s bold move to subject himself directly to market scrutiny will help the group overcome this crisis.

According to Shinsegae Group on the 8th, Chairman Chung was nominated that day as a co-CEO of Shinsegae Property. Shinsegae Property will soon hold a board meeting to recommend Chairman Chung as a registered director and will proceed with the formal appointment process following a shareholders’ meeting. Chairman Chung is also set to be named as a co-CEO of E-Mart. However, in the case of E-Mart, he will be nominated during the regular executive reshuffle in the second half of the year and will be formally appointed at next year’s shareholders’ meeting. Although the timing differs, Chairman Jung will now serve as CEO of both of Shinsegae Group’s two core affiliates.

Regarding his nomination as CEO, Chairman Jung stated, “I take the market’s demand for clear accountability in corporate management very seriously,” adding, “I will be evaluated by the board of directors and shareholders in my role as CEO.”

Analysts suggest that Chairman Chung’s decision was precipitated by the recent marketing controversy at Starbucks Korea, which sparked significant public outcry. Previously, on May 18, Starbucks Korea faced public backlash over a marketing controversy related to the May 18 Democratization Movement. As the controversy escalated into a political issue, Chairman Jung was compelled to personally appear at a public event to issue an apology to the nation. The matter remains under police investigation, leaving room for further controversy.

As the largest shareholder of Starbucks Korea, E-Mart cannot remain unaffected by this controversy. In fact, the entire Shinsegae Group has suffered a blow to its image following this controversy. This is why Chairman Chung issued a total of two public apologies—one in writing and one in person. However, as the negative sentiment surrounding the Shinsegae Group persisted even after these two apologies, it appears he has taken on the role of CEO to personally assume detailed responsibility for the company’s management.

A Shinsegae Group official stated, “Going forward, the group intends to listen more closely to the market’s critical voices directed at the company and Chairman Chung, and aims to be evaluated based on management performance.”

Consequently, Chairman Jung now serves on the boards of three group affiliates: E-Mart, Shinsegae Property, and AG Global Holdings. Previously, Chairman Jung was appointed as the inaugural chairman of the board of AG Global Holdings (then Grand Opus Holdings), a joint venture between Shinsegae Group and Alibaba International, last year.

What is significant is that E-Mart and Shinsegae Property, where Chairman Chung now serves as CEO, are the group’s core businesses. E-Mart is currently the group’s undisputed flagship affiliate. Although Chairman Chung had previously served as a registered director at E-Mart in 2010 and 2011, he stepped down from that position in 2013. Since assuming the role of Group Chairman in 2024, he has not participated in the board of directors for a total of 13 years. As a registered director bears legal responsibility for management activities, the mere fact that the group’s leader is listed as a director is considered an indicator of responsible management. For this reason, some observers view Chairman Jeong’s nomination as a registered director of E-Mart as a symbolic milestone for the Shinsegae Group.

Furthermore, Shinsegae Property is an affiliate focused on cultivating new growth engines in offline retail, such as Starfield. In particular, Shinsegae Property is strategically focused on the “future,” as evidenced by its recent move earlier this year to partner with U.S.-based Reflection AI to build an artificial intelligence (AI) data center. In other words, analysts suggest this move can be interpreted as Chairman Chung taking responsibility for both the present and future of the Shinsegae Group.

Seo Yong-gu, a professor in the Department of Business Administration at Sookmyung Women’s University, stated, “From Chairman Jeong’s perspective, appointing a new CEO is likely the strongest possible action he could take to resolve the Starbucks crisis and strengthen responsible management.” He added, “I view this move positively, as it involves him adding his name to the board of directors to personally reinforce responsible management and contain the situation before it escalates further.”

Meanwhile, Shinsegae Group announced on the same day that it has nominated Lee Hyung-cheon, a professional manager and former head of the Development Division, as co-CEO of Shinsegae Property. Shin Dong-woo, head of the Support Division at Shinsegae Property, was nominated as the new CEO of Starbucks Korea, the company at the center of the controversy. Shin, the finance expert nominated as the new CEO, previously served as head of the Strategic Planning Division at Starbucks Korea. He plans to prioritize the development of a reform plan for Starbucks moving forward.