In a dramatic and unprecedented legal move that has shaken South Korea’s corporate landscape, Kolmar Group founder and Chairman Yoon Dong-han has filed a lawsuit against his son, demanding the return of shares gifted to him amid sibling rivalry over a management dispute.
The lawsuit, filed on May 30 with the Seoul Central District Court, seeks to reclaim 4.6 million shares in Kolmar Holdings Co., the parent company of Kolmar Korea Co., an original development manufacturer (ODM) and supplier to global cosmetics brands such as Estee Lauder.
The shares, gifted to his son, Vice Chairman Yoon Sang-hyun, in December 2019, represent about 13.4% of the company – about half the son's 31.75% stake.
(Graphics byb Daeun Lee) The father, Yoon Dong-han, currently owns 5.59% of Kolmar Holdings, while his daughter Yoon Yea-won and her husband have a combined 10.62% stake.
At the heart of the dispute is a deepening rift between Yoon Sang-hyun and his sister, Yoon Yea-won, chief executive of Kolmar BNH Co., the group’s health supplements arm.
Industry watchers said what began as sibling rivalry over governance is now escalating into a full-blown succession crisis, pitting father against son.
Shares in Kolmar Holdings surged by the daily limit of 30% on Wednesday following news of the legal dispute, highlighting investor anticipation of a potential reshuffle in control or strategy at the family-run conglomerate.
Kolmar Korea Vice Chairman Yoon Sang-hyun FATHER’S DISCONTENT
The father's lawyers said that the 2019 gift was based on an implicit understanding that the heir would uphold a “pre-agreed succession structure.”
That arrangement, outlined in an informal governance pact, assigned the cosmetics and pharmaceuticals business to the son, while giving control of the health supplements business to the daughter, according to people familiar with the matter.
Sources said the son, Yoon Sang-hyun, violated this accord by attempting to unilaterally restructure governance
Specifically, Kolmar Holdings, led by Yoon Sang-hyun, recently moved to overhaul the board of Kolmar BNH – a direct threat to Yoon Yea-won’s leadership.
Kolmar BNH CEO Yoon Yea-won The move included a legal petition filed with the Daejeon District Court to convene an extraordinary Kolmar BNH shareholders’ meeting aimed at appointing new directors, including Yoon Sang-hyun himself.
The effort, sources said, could be part of a broader push to assert dominance over the group’s most profitable unit, despite public statements citing poor performance and shareholder dissatisfaction.
Dalton, now with a 5.69% stake, has been vocal about unlocking value in the group and successfully placed its Korea co-head, Im Seong-yoon, on Kolmar Holdings’ board in March.
This has intensified pressure on management to boost returns and streamline governance, particularly at Kolmar BNH, fueling the leadership struggle between the two siblings, sources said.
Yoon Yea-won, for her part, has pushed back such demands, accusing the activist-aligned restructuring plan of targeting her position as a scapegoat. During a company anniversary event in May, Chairman Yoon, the father, publicly reaffirmed that his daughter would retain control of the health supplements division, while the rest of the business would remain with his son.
LEGAL COMPLEXITY AHEAD
Analysts said the outcome of the lawsuit may hinge on whether the governance agreement is deemed legally binding – and whether it can be interpreted as an implicit condition of the 2019 share transfer.
Kolmar is a leading cosmetics ODM Sources close to the matter said no formal condition was attached to the share gift, and that the governance pact existed as a separate document signed by the three family members concerned.
Yoon Yea-won’s camp claims the agreement stipulates that her brother would support her “independent and autonomous” management of Kolmar BNH, though those terms do not appear verbatim in the document, according to sources.
“It will be challenging for the court to find a direct legal link between a share gift and a governance understanding, especially if they were documented separately,” said Park Hyo-yeon, a lawyer at online legal service firm Help Me. “Without a clearly defined conditional gift contract, the litigation could get complicated and protracted.”
Write to Yun-Sang Ko at kys@hankyung.com In-Soo Nam edited this article.
