Korean catering firm Ourhome CEO to leave amid sibling feud

South Korea’s catering service provider Ourhome Ltd. Chief Executive and Vice Chairwoman Koo Ji-eun has failed in her attempt to serve another term amid an intensifying feud with her siblings, casting doubts over the company’s growth given its global business and food tech development areas losing steam.

Her older brother and former CEO Koo Bon-sung, alongside her older sister Koo Mi-hyun, may try to sell Ourhome to private equity firms after taking control of the company, industry sources said.

Ourhome shareholders on Friday approved the appointment of Koo Bon-sung's eldest son as a new inside director in an extraordinary meeting, according to industry sources. A proposal to re-appoint the existing inside directors including the vice chairwoman was not even introduced at the meeting.

The move allowed Ourhome to meet the requirements of at least three directors for a firm with a capital of more than 1 billion won ($721,500).

Last month, Ourhome shareholders rejected the re-appointment of Koo Ji-eun, whose term as inside director ends on June 3, while approving the designation of the sister Koo Mi-hyun and her husband as new inside directors.

Ourhome has been engulfed in sibling disputes, including a legal battle between the former and incumbent CEOs, since 2017 as the four children of the late Chairman Koo Ja-hak together hold more than a 98% stake in the unlisted company.

The ex-CEO has 38.56%, followed by the current CEO with 20.67%. The oldest daughter Koo Mi-hyun holds 19.28%, while another daughter Koo Myung-jin has 19.6%.

SAVIOR OF TROUBLED COMPANY

The youngest daughter Koo Ji-eun took the helm of Ourhome in June 2021 when Koo Bon-sung stepped down from the CEO position as he was sentenced to a two-year suspended jail term due to driving misconduct.

Ourhome reported its first-ever loss in 2020 hit by COVID-19 under the late chairman’s only son.

The company has been recovering its earnings to enjoy record sales and profit last year as Koo Ji-eun has focused on expanding its global business and strengthening food technology since taking office.

Its operating profit surged 76% to an all-time high of 94.3 billion won in 2023 with sales up 8% to nearly 2 trillion won. Based on the healthy earnings, Ourhome gave staff, excluding executives, bonuses of up to 11.9 million won per employee earlier this month.

COMPANY SALE?

Ourhome’s board of directors controlled by Koo Bon-sung and Koo Mi-hyun was expected to sell the company to private equity firms, industry sources said. The eldest daughter had tried to sell her stake in 2022 when her brother said he would unload his shares.

Koo Mi-hyun wants to become the company’s CEO although she does not have any management experience, adding to speculations that the board is likely to accelerate the sale, according to the sources.

However, the sale may face a legal battle as the three sisters teamed up to dismiss their brother as the CEO in 2021 while agreeing to unify their voting rights, industry sources said. Koo Mi-hyun may break the agreement if she joins hands with her brother, according to the sources.

The oldest sister is likely to face a penalty of up to 120 billion won with a potential breach, investment banking industry sources said.

Koo Mi-hyun and Koo Ji-eun have drifted apart since a shareholders’ meeting over dividend payments last year. The elder sister asked for dividends of 45.6 billion won, 1.6 times the company’s net profit of 28.3 billion won for 2022, but the shareholders rejected the request.

The alliance between Koo Mi-hyun and Koo Bon-sung may not last long as the sister keeps changing her position, some industry sources said.

“Koo Mi-hyun reportedly wants to sell her stake, but former Vice Chairman Koo Bon-sung’s stance could then become a variable,” one of them said.

Write to Sul-Li Jun at sljun@hankyung.com
 

Jongwoo Cheon edited this article.