LG Household CEO denies exit rumors

Cha Suk-yong, chief executive of LG Household & Health Care, who shocked the market last week by dumping all of his shares in the company, has denied that he is preparing to retire anytime soon.

“It is unthinkable for a CEO to leave the company when his term has not yet expired,” Cha said in an interview with a local business daily, adding that he will complete his tenure through March 2017.

The stock prices of LG Household, a food and cosmetics business unit of LG Group, tumbled 12 percent on June 5 when the company confirmed the CEO’s selling of 22,000 shares worth 11 billion won ($10 million) in a public disclosure to the exchange.

On that day alone, the company lost 1 trillion won in market capitalization, fueling rumors of his exit that started in March when he stepped down as CEO of the Korean operations of Coca-Cola and no-frills cosmetics brand The Face Shop ― both affiliates of LG Household.

“Selling my shares has nothing to do with my resignation. I plan to use the money for something meaningful,” he told the Korea Economic Daily, unveiling his plan to donate to his alma master, Cornell University.

Cha, former CEO of P&G Korea and Haitai Confectionery and Foods, joined LG Household in 2005. Under his leadership, the company’s sales soared from 1.39 trillion won in 2005 to 4.32 trillion won in 2013.

On Monday, LG Household shares closed at 476,000 won, up 0.74 percent from 472,500 won on June 5, the last trading session of the week.

By Lee Ji-yoon (jylee@heraldcorp.com)