Laying Foundation for Succession
Tam Chul-kon, chairman of the Orion Group, has tranaferred about 620,000 shares of Orion Corp. to his children. Analysts say that Tam granted the shares in order to give his children funds needed to secure managerial control of the South Korean confectionery group.
Orion Corp. announced on June 27 that Tam sold 603,300 shares in off-hour trading and granted 619,780 shares to his son and daughter as a gift. Of the total, 185,934 shares were given to his daughter, Tam Kyung-sun and 433,846 shares to his son, Tam Seo-won.
As a result of the disposal, Tam's shareholdings in Orion Corp., the flagship of the Orion Group, dropped sharply from 1,420,750 to 197,670, with his stake falling to a mere 0.5%. On the other hand, Tam Seo-won became the third largest shareholder with 486,909 shares (a 1.23% stake) after Orion Holdings (a 37.37% stake) and his mother Lee Hwa-kyung (a 4.08% stake), who is vice chairperson of the group. Tam Kyung-sun followed her brother with 238,997 shares (a 0.6% stake). "As Orion's share price has been rising steadily, chairman Tam hurried to grant the shares to his children," an Orion official said. He added the proceeds from the sales of 603,300 shares would be used to pay gift taxes.
Chairman Tam’s eldest daughter, Tam Kyung-sun, joined Orion Corp. in 2010 and is currently serving as an assistant manager at the Orion Foundation, while Tam Seo-won is studying in China. As they are in their early 20s and early 30s, they are unlikely to begin to manage the Orion Group as top executives yet.
Industry watchers say that the owner family will continue to lay the foundation for building a succession base by making use of the inherited shares. They predict that the son and daughter will buy stocks of Orion Holdings to secure control over the entire group or pay their inheritance tax by selling the inherited stocks.