[Edaily Reporter KIM SAE-MI ] Lee Jang-han, Chairman of the CHONGKUNDANG Group, plans to gift his entire stake in CHONGKUNDANG(185750) to his three children. By transferring more shares to his eldest son, Lee Ju-won, an executive director at CHONGKUNDANG, than to his two daughters, the succession plan for the third generation of the family is becoming increasingly clear.

Entire 9.55% Stake in CHONGKUNDANG to Be Transferred to Children… Lee Ju-won Becomes 5% Shareholder

According to the Financial Supervisory Service’s electronic disclosure system on the 28th, Chairman Lee announced via a “Report on Trading Plans for Specific Securities” that he plans to gift 1,318,807 common shares of CHONGKUNDANG he currently holds to his three children between September 30 and October 29.

If the transfer is completed as planned, Chairman Lee’s stake in CHONGKUNDANG will drop from 9.55% to 0%. The largest portion of the transfer—528,807 shares (40.1%)—will go to his eldest son, Executive Director Lee Ju-won. His eldest daughter, Lee Ju-kyung, and his second daughter, Lee Ju-ah, will each receive 395,000 shares, accounting for approximately 30% of the total.

Executive Director Lee also issued a separate disclosure stating that he is scheduled to receive 528,807 shares of CHONGKUNDANG from Chairman Lee on the same day. Currently, Executive Director Lee holds 204,813 shares (1.48%) of CHONGKUNDANG. Once the gift is finalized, his holdings will increase to 733,620 shares, and his ownership stake will rise to 5.32%.

Lee Ju-kyung and Lee Ju-ah currently hold 162,516 shares (1.18%) of CHONGKUNDANG each. If they each receive a gift of 395,000 shares, their holdings will rise to 557,516 shares, and their ownership stake will increase to approximately 4.04%.

Eldest Son Received a Larger Share at KYONGBO PHARMACEUTICAL CO., LTD. as Well… Focus on Lee Ju-won for Both Promotions and Shareholdings

This gift follows a similar pattern to when Chairman Lee and his wife transferred their shares in KYONGBO PHARMACEUTICAL CO., LTD.(214390) to their three children last year.

Last September, Chairman Lee and his wife, Ms. Jeong Jae-jeong, gifted their entire holding of 957,503 shares of KYONGBO PHARMACEUTICAL CO., LTD. to their three children. At that time as well, Executive Director Lee received 357,503 shares—more than the 300,000 shares each of his two younger sisters received. As a result, Executive Director Lee’s stake in KYONGBO PHARMACEUTICAL CO., LTD. rose to 6.21%, surpassing Lee Ju-kyung’s 5.62% and Lee Ju-ah’s 5.26%.

Executive Lee also leads in terms of management involvement. Among Chairman Lee’s three children, Executive Lee is the only one directly involved in the management of CHONGKUNDANG. Starting as an inside director at CHONGKUNDANG Industries in 2018, he took on the role of head of the Development Planning Team at CHONGKUNDANG in 2020. After being promoted to director at CHONGKUNDANG last year, he was further promoted to executive in January of this year.

The family-owned company, B.L.S.M., also has a corporate governance structure centered on Executive Director Lee of SM ENTERTAINMENT CO., Ltd. Executive Director Lee is the largest shareholder of Bell SM ENTERTAINMENT CO., Ltd., holding a 40% stake, while Chairman Lee holds 30%, and Lee Ju-kyung and Lee Ju-ah each hold 15%. Since the end of 2024, Bell SM ENTERTAINMENT CO., Ltd. has been continuously purchasing shares of CHONGKUNDANG HOLDINGS CORP.(001630) —which sits at the apex of the group’s corporate structure—on the open market, and as of last June, its stake had increased to 0.47%.

However, the transfer of management control within the group is not finalized solely by this donation of CHONGKUNDANG shares. The CHONGKUNDANG Group operates under a holding company structure that runs from Chairman Lee → CHONGKUNDANG HOLDINGS CORP. → CHONGKUNDANG and KYONGBO PHARMACEUTICAL CO., LTD. While Chairman Lee holds 33.73% of the shares in CHONGKUNDANG HOLDINGS CORP.—the core of the group’s control—Executive Director Lee’s direct stake is only 2.89%. Lee Ju-kyung and Lee Ju-ah hold 2.55% and 2.59%, respectively.

With this gift, Executive Director Lee will hold the largest stake among the three children in both CHONGKUNDANG and KYONGBO PHARMACEUTICAL CO., LTD. Combined with his participation in group management and the acquisition of CHONGKUNDANG HOLDINGS CORP. shares through family-owned companies, the succession structure centered on the eldest son is becoming increasingly clear. It is expected that the manner in which Chairman Lee’s 33.73% stake in CHONGKUNDANG HOLDINGS CORP. is transferred to his children will determine the future course of management succession at the CHONGKUNDANG Group.