This combined photo shows the three sons of Hanwha Group Chairman Kim Seung-youn. From left, eldest to youngest, are Hanwha Solutions Vice Chairman Kim Dong-kwan, Hanwha Life Insurance Vice President Kim Dong-won and Kim Dong-seon, head of Hanwha Hotels & Resorts' premium leisure group. Courtesy of Hanwha Group

By Park Jae-hyuk

Hanwha Solutions' latest plan to spin off its Galleria division has been interpreted by many as part of efforts to hand over control of the group's retail business to Chairman Kim Seung-youn's youngest son Kim Dong-seon, according to domestic securities analysts, Monday.

The company announced last Friday that it will list Hanwha Galleria on the benchmark KOSPI market by March next year after spinning off the department store chain operator. It also disclosed its plan to split off its automotive components and ethylene-vinyl acetate (EVA) divisions, in order to focus more on the renewable energy sector.

The announcement was made about a year and a half after Hanwha Solutions merged with Hanwha Galleria in April last year, in an attempt to improve the retailer's financial soundness.

"Hanwha Solutions' plan to spin off Hanwha Galleria is viewed as a preparatory step for the chairman's third-oldest son," Hana Securities analyst Yoon Jae-sung said in his report. "Because Hanwha Galleria will be upgraded to a first-tier subsidiary [of Hanwha Corp.] from a second-tier subsidiary, the three-way split among the chairman's three sons will be clear."

Meritz Securities analyst Rho Woo-ho also said that the structural reform plan can be seen as the largest shareholder family's intention to reorganize the group into three sectors ― manufacturing, financial services and retail.

Despite the group's continued denials, there has been speculation in recent years that the chairman's oldest son, Hanwha Solutions Vice Chairman Kim Dong-kwan, will inherit the group's solar energy, petrochemical, aerospace and defense technology businesses.

The second-oldest son, Hanwha Life Insurance Vice President Kim Dong-won, has been expected to continue directing the group's financial subsidiaries, while the youngest son will be tasked with the group's hotel, leisure and retail businesses.

Among the three heirs, the oldest has drawn the most attention, because he has been expected to take charge of the group's core businesses. He has also been co-CEO of Hanwha Aerospace and is in charge of business strategy.

Compared to him, his two younger brothers have remained relatively out of the public eye.

The youngest son, however, has continued to expand his presence in the group since returning in late 2020 to manage Hanwha Energy's global strategies, after running a restaurant in Germany and working temporarily for the domestic private equity firm SkyLake Equity Partners. The 33-year-old temporarily left the group in 2017 over the allegation that he had assaulted law firm Kim & Chang's new recruits during a binge-drinking session at a bar in Seoul.

In May last year, he was transferred to Hanwha Hotels & Resorts to direct its premium leisure business. Earlier this year, he was appointed as an executive of Hanwha Solutions Galleria Division in charge of new business strategies.

As Hanwha Hotels & Resorts spun off its horseback riding business into Hanwha Next, he is also set to manage the new company's future strategies, based on his career as a dressage rider for the Korean national team.

Since last year, he has also been running Sugimoto, a luxurious sushi restaurant in Seoul, independently from Hanwha Group.