Shares of Samhwa Paint (000390.KS) surged for a second consecutive day following the sudden death of Chairman Kim Jang-yeon, the company's largest shareholder, from acute sepsis, as markets focus on potential management control disputes with the co-founding family.
The stock rose 18.54% to 9,400 won on Wednesday, according to the Korea Exchange. Shares climbed as much as 28.4% to 10,180 won during intraday trading before paring some gains. Samhwa Paint has risen more than 60% over three trading days after hitting the daily limit up in the previous session.
The rally was triggered by news that Chairman Kim died on January 16 at the age of 69. While Kim held a 22.76% stake as the largest shareholder, his eldest daughter Kim Hyun-jung, a vice president widely expected to succeed him, owns just 3.04%. Kim's older sister Kim Gwi-yeon holds 1.50%.
The combined stake of Chairman Kim and related parties stands at 27.39%, a level considered vulnerable. The ownership ratio could decline further if the family sells shares to pay inheritance taxes.
Markets are watching the stake held by the family of the late former Chairman Yoon Hee-jung, the second-largest shareholder group that does not participate in management. Yoon's sons, Yoon Seok-jae and Yoon Seok-cheon, hold 6.90% and 5.52% respectively. Including related parties, the Yoon family's combined stake is 20.10%.
Samhwa Paint was co-founded in 1946 by former Chairman Kim Bok-kyu, the late chairman's father, and the Yoon family. The Yoon family stepped back from frontline management during the second-generation leadership transition in 2008.
