Hi Mart and its major shareholder Eugene Corp. reached an 11th-hour compromise Wednesday on the new leadership of the nation’s largest electronics appliance retailer, ending a week of feuding over the control of management.
During a general meeting in the morning shareholders approved an agreement calling for the so-called “dual-CEO” system in which both Hi Mart CEO Sun Jong-koo and Eugene CEO Yu Kyung-sun control the retailer.
Industry sources said that Sun and Yu had no choice but to strike a deal to prevent their conflict from further tarnishing the company’s image.
Ahead of the planned shareholders’ vote, Yu had an advantage by securing 32.4 percent of shares, compared to Sun’s 27.6 percent.
Eugene, however, appears to have thought twice about going ahead with the dismissal of Sun amid fierce resistance from the company’s 5,000 employees.
The workers set up an ad-hoc committee to support Sun and some 500 manager-level employees threatened to quit if the shareholders’ approved Sun’s dismissal.
Sun, who has long protested Yu’s frequent intervention into management, seemed to have agreed to the two-chief-executive system.
It has not yet been announced what roles Yu and Sun would share.
Sources, however, said their hasty agreement failed to solve fundamental problems, leaving much room for conflict over who would take the initiative when making an important management decision.
Despite his largest-shareholder status, Eugene is expected to see more difficulties in dealing with Sun and other employees who have displayed hostility toward him in recent weeks.
“I have fully learned about the concerns of employees regarding the situation. I’ll consider them when managing the company in the future,” Yu said before the shareholders’ meeting.
Hi Mart, established in 1999, is a former domestic sales unit of Daewoo Electronics, which went under court receivership during the 1997-98 financial crisis.
When the company was preparing for a spin-off, Sun, then sales chief at Daewoo, and other executive officials purchased 70 percent of the company shares and secured jobs for employees.
Over the past decade, the company’s sales have surged from 680 billion won ($593 million) in 1999 to 3.5 trillion won last year, growth most workers have largely attributed to Sun’s leadership.
Eugene acquired Hi Mart from Korea CE Holdings with an investment worth 1.95 trillion won in December 2007.
By Lee Ji-yoon (
jylee@heraldcorp.com)
