The Fair Trade Commission’s annual announcement of business enterprises restricted of cross-ownership is both an honor and a bother for businessmen.

Yoked on businesses with more than 5 trillion won ($4.8 billion) in assets, the designation is perceived as a restriction on their operations because it bans additional cross-shareholding and affiliates from guaranteeing debt among themselves, while prohibiting the company’s exercise of legitimate voting rights.

Still, it is an acknowledgement of good managerial aptitude. 


In 2014, Samchully Group appeared on the list for the first time with total assets of 5.4 trillion won, being officially tagged as one of the country’s 63 business conglomerates. It retained its status this year.

The group has come a long way since starting out as a briquette producer in 1955 to grow into a comprehensive energy developer. It has 12 major affiliates, scores of minor firms and 21 overseas subsidiaries under its wing, reporting 3.7 trillion won in sales in 2014.

Friendly management through generations

What makes Samchully unique among business conglomerates is that it has always had two leaders with equal rights and responsibilities.

The current chairpersons ― Yi Man-deuk, who oversees Samchully Corp. and several other affiliates, and Yoo Sang-deok in charge of Samtan Co. and its affiliates ― own exactly the same number of shares in the enterprise. In 2010, Yi and Yoo made headlines when Samchully sold one share of the company to a stock-trading firm in order to let Yi and Yoo keep exactly the same stake.

Such “strict equality” has been kept between both the founding families since 1955, when Yi’s father Yi Jang-kyun and Yoo’s father Yoo Seong-yeon cofounded the Samchully Briquette company. The joint-leaders, who are longtime friends, have reportedly made a pact.

The agreement notes that the two families hold equal stake in all affiliates; the profits should be shared equally regardless of the amount of investment made by each party; and never to push a business project if one objects. The pact also states that in case of an accident or tragedy, one family should look after the other.

A local daily reported that the two families are very tight and that at one point, Yoo thought the Yis were his actual blood relatives. “I have always wondered why my uncle Yi has a different family name,” Yoo was quoted by the newspaper. 


“The sons of Yi Jang-kyun and Yoo Seong-yeon are still close. They make a great example by their friendship and respect for each other,” a Samchully insider said.

Seeking a better future

Yi and Yoo have managed to make the best of what their fathers have left them.

Samchully Corp. is the nation’s No.1 compressed natural gas supplier, boasting the largest network in Gyeonggi Province. The company also has been keen on developing the next-generation growth engine, by establishing or acquiring energy-related companies.

In 2012, the company joined hands with the Korea South-East Power Co. and POSCO E&C for power generation, building a comprehensive thermoelectric power plant station in Ansan of Gyeonggi Province.

It has also established an asset management unit and made investments in the energy industry overseas. In addition, it made inroads into the food and beverage industry, launching dining brands Chai797 and Gastropub and buying Courtyard Anaheim at the Disneyland Resort in the U.S.

Samtan Co., which specializes in coal mining, has set its sights overseas. In 1982, it acquired Pasir coal mine in Indonesia. The company has also expanded to independent power plants, palm oil processing and gas development businesses.

Yoo and Yi are part-time executives of each other’s business units.

Will they separate?

But rumors of a split have lingered for a decade.

The chairpersons have already been running separate units of a de facto divided company, by independently looking after Samchully Corp. and Samtan Co. Both companies dissolved their cross-shareholding structures by 2010.

“The two units have been pursuing different directions with the only thing in common being their energy businesses,” an analyst was quoted as saying to a local daily, supporting the split claims.

The companies denied the rumors.

But Samchully has one other pending issue ― its cross-shareholding issues.

By law, a business conglomerate designated by the FTC should sell the shares used for cross-shareholding purposes. Though it was given a grace period last year, Samtan Co., which has to sell its Samtan International shares, has yet to make a decision.

“We are considering various options and will come out with the best solution to abide by the law,” said Samtan Co. spokesman Woo Yong-min.

By Bae Ji-sook (baejisook@heraldcorp.com)