South Korea’s LG Group chairman dies from illness at 73

LG Group chairman Koo Bon-moo meets US President Barack Obama (not pictured) as they attend the groundbreaking of a factory for Compact Power Inc. in Holland, Michigan, US. (Reuters)
Updated 20 May 2018
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South Korea’s LG Group chairman dies from illness at 73

  • The chairman of South Korea’s LG Group, Koo Bon-moo, passed away on Sunday after a year-long battle with brain disease
  • Prior to its chairman’s death, LG Group had established a holding company in order to streamline ownership structure and begin the process of succession

SEOUL: The chairman of South Korea’s LG Group, Koo Bon-moo, instrumental to transforming the country’s fourth-largest conglomerate into a global brand, passed away on Sunday after a year-long battle with brain disease.
LG Group said in a statement Koo, 73, had been ill for a year.
A group official said Koo had been fighting a brain disease and had undergone surgery. The official declined to be named due to the sensitivity of the matter.
“Becoming the third chairman of LG at the age of 50 in 1995, Koo established key three businesses — electronics, chemicals and telecommunications — led a global company LG, and contributed to driving (South Korea’s) industrial competitiveness and national economic development,” LG said.
Under Koo’s leadership, the conglomerate changed its corporate brand to LG from Lucky Goldstar and sold LG’s semiconductor business to Hyundai, now SK Hynix Inc, under government-led restructuring in the wake of the Asia financial crisis in the late 1990s.
Major affiliates are LG Electronics Inc, display maker LG Display and electric car battery maker LG Chem.
Prior to its chairman’s death, LG Group had established a holding company in order to streamline ownership structure and begin the process of succession.
The country’s powerful family-run conglomerates are implementing generational succession amid growing calls from the government and public to improve transparency and corporate governance.
LG Corp, a holding company of the electronics-to-chemicals conglomerate, said on Thursday its longtime chairman was unwell and planned to nominate his son to its board of directors in preparation for a leadership succession.
Heir apparent Koo Kwang-mo is from the fourth generation of LG Group’s controlling family. He owns 6 percent of LG Corp. and works as a senior official at LG Electronics.
The senior Koo’s younger brother, the group’s vice chairman Koo Bon-joon, who led LG Electronics for many years, effectively managed the conglomerate in his stead.
South Korean prosecutors said this month they raided LG Group’s head office as part of a probe into alleged tax evasion by family members controlling the conglomerate.
Analyst do not see a change at the helm being disruptive to the group’s business.
“Although Koo passed away at a relatively early age, his son has been already in a senior position and I don’t think there will be a big change in governance structure or strategic decisions,” said Park Ju-gun, head of corporate analysis firm CEO Score.
The company said Koo’s funeral would be held privately at the request of the family.


Abu Dhabi Financial Group unit offers to buy Abraaj’s investment management arm

Updated 28 min 13 sec ago
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Abu Dhabi Financial Group unit offers to buy Abraaj’s investment management arm

ABU DHABI: A unit of Abu Dhabi Financial Group has made a conditional offer to buy private equity firm Abraaj’s investment management business for $50 million, according to a document reviewed by Reuters.
The offer from Abu Dhabi Capital Management (ADCM) is well below the $125 million offered by New York-based private equity firm Cerberus Capital Management before Dubai-based Abraaj filed for provisional liquidation in the Cayman Islands last week.
It was unclear whether the terms of the offer that Cerberus made were different from the one made by ADCM.
Abraaj has been bruised by a row with four of its investors, including the Bill & Melinda Gates Foundation and International Finance Corp. (IFC), over how it used their money in a $1 billion health care fund.
Abraaj has denied it misused the funds.
ADCM, an ADFG entity based in Cayman Islands, wants to become the General Partner of the limited partnerships, which have committed money to Abraaj’s various private equity funds.
Abraaj acts as the general partner for these limited partnerships.
Some Gulf limited partners — ranging from financial institutions to pension funds and family businesses — in funds of Abraaj had asked ADFG to explore a buyout of Abraaj’s investments business as they were concerned about their holdings, two sources familiar with the talks told Reuters.
Abraaj, which declined to comment on ADCM’s offer, has debt estimated at over $1 billion, sources have told Reuters.
Since the dispute went public early this year, Abraaj has split its investment management business and holding company, founder Arif Naqvi stepped aside from day-to-day running of its private equity fund unit and the firm halted its investment activities.