Aging founders return to save struggling construction companies

Intensifying difficulties in the domestic construction industry have prompted two founders of two medium-sized construction firms to return to management despite their advanced ages, according to industry officials, Thursday.

Taeyoung Group announced earlier this week that Honorary Chairman Yoon Se-young will return as the CEO of TY Holdings, the group’s holding firm, after a board meeting and a general meeting of shareholders in March next year.

The decision was made five years after the now-89-year-old founder had handed over control of the group to his son, Chairman Yoon Suk-mynn, who has worked for the group’s construction unit for three decades.

Born in 1933, the senior Yoon founded Taeyoung E&C in 1973 and broadcaster SBS in 1990. The group has 78 affiliates and 10 trillion won ($7.5 billion) in assets. Since retiring in March 2019, he has served as the honorary chairman, advising on key decisions related to the group.

“The founder’s comeback is intended to fulfill Taeyoung E&C’s social responsibility, as looming project financing risks cause hardships for the entire construction industry,” a Taeyoung Group official said.

Taeyoung E&C’s credit rating was downgraded this year, due to uncertainties over its financial soundness. After the construction firm was rumored to be going bankrupt, the group borrowed over 800 billion won from the financial market and decided to sell Taeyoung Industry, a lucrative subsidiary involved in the logistics business.

To overcome the crisis, the founder also told employees that he would go back to basics and risk everything he had to save the entire group including all of its affiliates, according to Taeyoung.

With his decision to return, the holding firm TY Holdings also asked retired executives to return in order to assist the founder. As a result, it has become uncertain whether the founder’s 59-year-old son, who holds a 25.2 percent stake in TY Holdings, will continue to participate

“Amid these economic difficulties, agile and careful decision-making has become more important than ever. ”

in management.

In a similar instance in August, Lee Joong-keun, the 82-year-old founder of Booyoung Group, returned as chairman after receiving a presidential pardon on National Liberation Day on Aug. 15.

After he resigned in October 2020 as a result of his conviction on embezzlement and breach of duties charges, the group faced diminishing revenues and suffered an operating loss last year. In addition, Booyoung was removed earlier this year from the list of Korea’s 20 largest business groups in terms of asset size, for the first time in eight years.

“Amid these economic difficulties, agile and careful decision-making has become more important than ever,” Lee said at the time of his return.

As he remains active in managing the company, it is uncertain when and how he will hand over his 94 percent stake in the group’s holding firm to his three sons and one daughter.