Uncertainty Looms at Celltrion as Chairman Seo Jung-jin's Extramarital Affair Comes to Light

Key Highlights :

1. Celltrion is facing uncertainties over the potential handover of Chairman Seo Jung-jin's management rights to his two sons.

2. The chairman's two daughters from an extramarital affair have been recognized last year as his biological children.

3. As of March, the chairman owned a 98 percent stake in Celltrion Holdings, which holds a 20 percent stake in Celltrion and a 24 percent stake in Celltrion Healthcare.

4. Although the company has never mentioned the succession of the chairman's management rights, his two sons born from his wife have been regarded as the next leaders of the biotech firm, because they were appointed as executive directors of Celltrion affiliates in 2021.

5. Legal experts expect the Celltrion chairman to give his stocks to his sons while he is alive, so as to circumvent potential claims by his daughters for his assets after his death.

6. Under inheritance law, his daughters may file a suit to inherit the minimum amount of wealth from their father.

     Celltrion, one of the largest biopharmaceutical companies in Korea, is facing uncertainty over the potential handover of its management rights to Chairman Seo Jung-jin's two sons, Celltrion Board Chairman Seo Jin-seok and Celltrion Healthcare Board Chairman Seo Joon-serk. This follows the recent revelation that Seo Jung-jin had two daughters from an extramarital affair and that they were recognized last year as his biological children.

     The mother of the two daughters has spoken out in a recent interview with a local broadcaster, emphasizing that her children have the right to inheritance. This has led to speculation that the two daughters could compete for the assets of Korea's third-richest man. Seo Jung-jin currently owns a 98 percent stake in Celltrion Holdings, which holds a 20 percent stake in Celltrion and a 24 percent stake in Celltrion Healthcare.

     The two sons, born from Seo Jung-jin's wife, have been seen as the potential successors of the biotech firm. This was further cemented when they were appointed as executive directors of Celltrion affiliates in 2021. However, legal experts believe that Seo Jung-jin is likely to give his stocks to his sons while he is alive, in order to avoid potential claims by his daughters for his assets after his death.

     Under inheritance law, Seo Jung-jin's daughters can file a suit to inherit the minimum amount of wealth from their father. This has caused concern among the chairman, as his daughters may use inherited Celltrion affiliate shares to intervene in company management.

     This uncertainty has had a visible impact on the stock prices of Celltrion affiliates, which fell sharply during Wednesday's trading session. The prices bounced back on Thursday as several news outlets reported that there will be a limited impact on the company's corporate governance.

     Celltrion declined to comment on the chairman's personal affairs, while his attorney stated that it is too early to talk about the 65-year-old chairman's succession plan. The attorney also sued the mother of the chairman's two daughters on accusations of blackmail.

     The mother is the owner of two firms named Seorin Holdings and Seowon D&D, both of which were designated this year as companies belonging to Celltrion Group. Although both companies are irrelevant to other Celltrion affiliates in terms of shareholding, the Fair Trade Commission considers them to belong to Celltrion Group, because of their owner's relationship with the Celltrion chairman.

     In the face of this uncertainty, it remains to be seen how Celltrion will respond to the potential handover of its management rights. It is also unclear how the two daughters will react to the situation, and whether they will pursue their right to inheritance. For now, the future of Celltrion remains uncertain.

Continue Reading at Source : koreatimes