South Korea’s founder-led businesses are exploring succession strategies that extend beyond traditional family inheritance, raising questions about corporate governance, ownership continuity and tax planning for investors. Ceragem, a privately held home health-care company, has taken an unusual approach: Founder and Chairman Lee Hwan-sung has adopted Chief Executive Lee Kyung-soo as his son and transferred a 10% stake in the company to him.
The company announced the first phase of the succession plan on October 20. Lee Hwan-sung, born in 1961, adopted Lee Kyung-soo, born in 1978, as his adult son last year and completed the initial share transfer this year. Ceragem said the required gift-tax filing has also been completed.
The transfer involved approximately 579,498 shares, equivalent to 10% of Ceragem’s 5.79 million outstanding shares. The company did not disclose the value of the transaction.
The move formalizes a relationship built over more than two decades, during which Lee Kyung-soo helped transform Ceragem’s domestic business. He joined the company as an entry-level employee in 2003 and advanced through overseas sales planning, sales strategy and executive roles before becoming chief executive in December 2021.
His biggest contribution came as Ceragem shifted its focus toward South Korean consumers. Founded in 1998, the company initially expanded through overseas markets, including the U.S. and China, before accelerating its domestic push in 2018. Lee helped broaden its business beyond spinal-care medical devices into a wider range of home health-care appliances.
In 2019, Ceragem launched Well Cafe, a retail concept that combines a cafe with hands-on product demonstrations. The format gave consumers an opportunity to experience the company’s products before buying them. Ceragem continued expanding during the COVID-19 pandemic, opening 82 additional locations in 2020.
The strategy delivered rapid growth. Ceragem said revenue from its domestic strategic business division climbed to about $340 million in 2021 from roughly $14 million in 2018, an increase of nearly 24 times in three years.
For investors watching the global home health-care market, the succession also highlights how founder-led companies can seek to preserve operational continuity while reshaping ownership. Unlike a conventional handover to a biological child, Ceragem’s arrangement combines executive succession with a formal legal adoption, potentially reducing uncertainty over the future leadership and inheritance of the business.
The company said it considered several succession options to protect its independence, maintain management continuity and stabilize its long-term ownership structure.
Under South Korean civil law, an adopted child generally has the same legal status as a biological child. The adoption therefore gives Lee Kyung-soo the status of a legal heir to the founder’s estate, subject to applicable inheritance law, even without a separate will.
The arrangement could also open the door to preferential tax treatment for the transfer of a family business if Ceragem and the parties satisfy additional requirements, including rules on company size, management history and share ownership. The adoption alone does not guarantee eligibility.
Ceragem said it has not finalized the next stage of the succession plan. Further decisions will depend on the company’s management and business conditions, with medium- and long-term options still under review.
