MSHC, the family holding company of South Korea's Chesis Group, purchased a 4.5% stake worth 1.2 billion won in listed auto parts company Chesis through the third day of this month. The holding company is controlled by Chairman Lee Myung-gon, 69, who owns 38.53%, and his son Vice President Lee Jun-seong, 37, who holds 35.65%. The structure has served as the foundation for the Lee family's management control for over 20 years and facilitated succession planning that began in 2007 when the heir was 18 years old. MSHC operates as a de facto holding company controlling two core auto parts subsidiaries: AMS, which produces headlamps, and Chesis, which manufactures rear axles.
MSHC Purchases Additional Chesis Shares
Last month, MSHC began aggressively purchasing shares of listed auto parts company Chesis on the stock market. Through the third day of this month, the accumulated purchases totaled 4.5% of shares worth 1.2 billion won. This acquisition strengthened MSHC's stake in Chesis from 20.84% to 25.34%. The holding company had previously invested a total of 4.2 billion won in two capital increases in December 2015 and January 2021, but its stake had been diluted to 20.84%.
Lee Family Establishes Holding Company Structure in 2011
In 2011, Chairman Lee restructured the group's ownership. He spun off the auto parts business division from AMS through a physical division and renamed it MSHC. This marked the transition to a de facto holding company system. The current ownership structure—with Chairman Lee and Vice President Lee controlling MSHC, which in turn controls the two main auto parts companies AMS and Chesis—has remained the backbone of the family's control system.
In December 2001, Chesis incorporated auto parts company AMS into its group. AMS served as the predecessor to MSHC. At that time, Chairman Lee owned 70% of AMS as the largest shareholder while holding 28.85% of Chesis individually. In 2002, AMS acquired a 12.63% stake in Chesis worth 1.7 billion won from four SL executives. In May of the following year, Chairman Lee directly transferred 14.10% to AMS for 2.3 billion won, making AMS the largest shareholder of Chesis.
Succession Planning Transfers MSHC Stakes Since 2007
In 2007, Chairman Lee transferred 33.03% of AMS shares to his eldest son, Vice President Lee Jun-seong, when the heir was 18 years old. This established the succession foundation with the structure: Vice President Lee → AMS → Chesis. The father and son subsequently strengthened their control over MSHC. In October 2013, MSHC reduced capital by purchasing back a 5.27% stake from affiliate Altech for 1.2 billion won. The father and son also directly purchased shares from former representative Jang Seok-dong in 2008 and 2015.
Chairman Lee's individual stake in MSHC, which had decreased to 28.32% after the 2007 transfer, increased to the current 38.53%. Vice President Lee's stake expanded to 35.65%. The father-son duo's combined holdings reach 74.18%, with the remaining 25.82% held by four other shareholders.
Family Control Reaches 39.59% Through MSHC
Chairman Lee's wife, Choi Jae-won, 67, sold all her Chesis shares on the market between July 2004 and January 2006, converting them to 900 million won in cash. Vice President Lee also sold shares. Between November 2008 and March 2013, he purchased approximately 200 million won worth of shares on the market and invested about 200 million won in a December 2015 capital increase, increasing his stake to 2.33%. However, in September 2019, he sold all shares on the market for 1.9 billion won.
Currently, Vice President Lee holds 2.17% of Chesis shares, which came entirely from his father's gift. In January 2021, Chairman Lee invested 1.5 billion won in a 12.6 billion won capital increase and maintained 14.25%. He then gifted 4.33% worth 1.4 billion won (based on closing price on the gift date, reflecting the April 500 won to 2,500 won par value consolidation at 4,955 won) to his wife (2.16%) and son.
The Lee family's stake in Chesis stands at 14.25% individually, but their controlling stake reaches 39.59% through MSHC. Vice President Lee's succession foundation—structured as Vice President Lee (35.65%) → MSHC (100%, 25.34%) → AMS and Chesis—has become more solid.
FAQ
What is MSHC's role in Chesis Group's ownership structure?
MSHC operates as a family holding company that controls Chesis Group's two main auto parts subsidiaries: AMS, which produces headlamps, and Chesis, which manufactures rear axles. Chairman Lee Myung-gon owns 38.53% of MSHC while his son Vice President Lee Jun-seong holds 35.65%, giving the father-son duo combined control of 74.18%.
How did succession planning begin at Chesis Group?
Succession planning began in 2007 when Chairman Lee transferred 33.03% of AMS shares to his son Vice President Lee Jun-seong, who was 18 years old at the time. This established the foundation for the heir's control structure: Vice President Lee → MSHC → AMS and Chesis. The structure has been strengthened through subsequent share acquisitions and capital increases.
What stake does the Lee family control in Chesis through MSHC?
Through MSHC's recent stock purchases, the holding company increased its stake in Chesis from 20.84% to 25.34%. Combined with Chairman Lee's individual 14.25% stake, the family's controlling stake in Chesis reaches 39.59%. MSHC purchased 4.5% of Chesis shares worth 1.2 billion won through the third day of this month.
