Amid U.S. Tariff War... Leadership Void at Hankook & Company 'Management Disruption'

[Financial News] With the court detention of Chairman Cho Hyun-bum, who leads Hankook & Company Group (Hankook Tire), the company is facing a zero-visibility situation. Especially as external uncertainties such as the high tariff policies of the U.S. Donald Trump administration are increasing, the leadership void is heightening the sense of crisis both inside and outside the company.
According to the industry on the 29th, Hankook & Company Group is struggling to devise countermeasures as Chairman Cho has been detained. The Seoul Central District Court sentenced Chairman Cho, who was tried for embezzlement and breach of trust charges worth 20 billion won, to a total of three years in prison and detained him in court.
Hankook & Company Group, which initially expected to avoid court detention, cannot hide its dismay at Chairman Cho's detention. Previously, Chairman Cho was arrested and indicted in March 2023 and released on bail in November of the same year. Afterward, he won a management rights dispute with his siblings and private equity funds (PEF) and embarked on active management moves, including significant mergers and acquisitions (M&A).
Hanon Systems, which Chairman Cho led the acquisition of, is a representative example. Chairman Cho completed the acquisition of Hanon Systems, the world's second-largest vehicle thermal management (HVAC) company, earlier this year. With Chairman Cho's decision to acquire Hanon Systems, Hankook & Company Group's asset total ranking jumped from 49th to 27th, and it was re-designated as a conglomerate subject to mutual investment restrictions, rapidly expanding the group's size.
However, as Chairman Cho eventually enters a 'management from prison' system, the goal of Hankook & Company Group to leap beyond tires to become a global mobility company has hit a red light. Especially with the increasing uncertainties such as the 'tariff war' of the Trump administration, Hankook Tire attempted to respond by expanding its local factories in the U.S., but Chairman Cho's court detention has made it difficult to respond swiftly to major group issues.
If the owner void delays the research and development (R&D) expenditures and investment decisions that Hankook & Company Group has been pursuing, not only Hankook Tire but also its partners may face increased difficulties. If this happens, the automotive industry and the manufacturing sector as a whole will inevitably be negatively affected.
Future strategy formulation is also expected to face disruptions. This month, Hankook & Company Group established 'Hankook & Company Ventures Co., Ltd.', a corporate-led venture capital (CVC), for the first time in 84 years since its founding. Hankook & Company Group planned to build an ecosystem that collaborates with core affiliates by extensively supporting startups discovered by Hankook & Company Ventures, but this too has become difficult.
A Hankook & Company Group official stated, "We are shocked by the unexpected result, and the entire group is in great shock," adding, "We are carefully discussing legal response options, including an appeal, with the legal team."cjk@fnnews.com Choi Jong-geun, Jeong Won-il, Choi Eun-sol reporters