Yulsan Group

Yulsan Group
TypeChaebol
Industry
  • Construction
  • Hotels
  • Electronics
FoundedJune 17, 1975; 51 years ago (1975-06-17)
Defunct1979 (1979)
FateDissolved
Headquarters
Seoul
,
South Korea
Divisions
List of divisions
  • Yulsan Industries
  • Yulsan Construction
  • Yulsan Aluminium
  • Yulsan Electronics
  • Yulsan Maritime
  • Yulsan Heavy Industries
  • Yulsan Engineering
  • Yulsan Shoes
  • Kwangsong Leathers
  • Kyonghung Products
  • Seoul Combined Terminal
  • Hotel Naejang-san
  • Tonga Industries
  • Yusin Tourist

Yulsan Group was a South Korean chaebol active from 1975 to 1979 and notable for the scandal surrounding its demise.

History

Foundation

Yulsan Group was founded on 17 June 1975 by Shin Sun-Ho [ko] as an exporter of construction materials. Its first primary business was the export of building materials to the Middle East. It also acquired Shinjin Aluminium on 30 December 1975. As an exporter, it was provided with preferential loan rates of 6-10% compared to 17-23% for general loans.

Collapse

In 1978, Yulsan was convicted of violating Saudi Arabian law regarding the prohibition of wholesale or retail activities by foreigners, with the resulting fine causing severe damage to Yulsan's financial position. In addition, the South Korean government enacted a ban on cement exports as an inflation reduction measure. Furthermore, Yulsan's construction business struggled to sell its apartments due to the 8 August speculation control measures.

Kidnapping incident

On January 25 1979, Shin was kidnapped by assailants claiming to be government officials. He escaped 55 minutes later at the Yanjae toll gate on the Gyeongbu Expressway.

Arrests

Shin Sun-Ho was arrested on 4 April 1979 on charges of embezzlement and violations of the Foreign Exchange Control Act. Shin was accused of faking documents in order to secure bank loans totalling ₩‎152.3 billion. Furthermore, he was believed to have been assisted by influential members of the government. Alongside Shin's arrest, on 13 April the presidents of three banks that had provided loans to Yulsan (Seoul Trust Bank, Hanil Bank, and Korea First Bank) were also arrested on charges of graft.

Dissolution and sale

The group was eventually liquidated. Yulsan Heavy Industries and Yulsan Aluminium were acquired by the Hyosung Group in September 1979.

Fallout

The collapse of Yulsan resulted in a general reduction of confidence in Korean businesses' creditworthiness worldwide.

Operations

The Yulsan Group largely operated in the fields of construction, hotels, and electronics. It consisted of fourteen affiliated companies.

The group was heavily reliant on debt for funding its operations, as in 1977 it had a 26-to-1 debt to equity ratio.

Yulsan Aluminium

Shinjin Aluminium was acquired from the Shinjin Group in December 1975, and renamed Yulsan Aluminium. It was based in Gwangju, and was a major exporter in the region.

Yulsan Industries

Yulsan Industries was the trading arm of Yulsan, and was designated a general trading company by the South Korean government in 1978.

Kyonghung Products

Kyonghung Products was acquired in July 1977, and produced clothing under the Bambim (밤빔) name. It sold clothing both for domestic customers and for export.

Yulsan Construction

Yulsan Vocational Training Centre

Yulsan Construction operated a training centre in Janghowon-eup, Icheon for the purpose of training students in skills such as plumbing and electrical work.

References

  1. 1 2 Park, Hun Joo (2007-08-01). "Small Business' Place in the South Korean State–Society Relations". Asian Journal of Political Science. 15 (2): 195–218. doi:10.1080/02185370701511560. ISSN 0218-5377.
  2. 1 2 3 4 5 6 7 8 United States Joint Publications Research Service (1979-08-06). Korean Affairs Report No. 34. Internet Archive.
  3. ↑ Myong-sik, Kim (1978-07-31). "Man with unlimited business expectations". The Times. Korea Exports, VIII.
  4. ↑ Kim, Joon-Kyung; Shim, Sang Dal; Kim, Jun-Il (January 1995), "The Role of the Government in Promoting Industrialization and Human Capital Accumulation in Korea", Growth Theories in Light of the East Asian Experience, University of Chicago Press, pp. 181–200, retrieved 2026-08-12
  5. ↑ Richardson, Ron (1979-04-24). "Limiting the shock waves". Financial Times. p. 34.
  6. ↑ Hallwood, Paul (1981). Oil, debt, and development : OPEC in the Third World. Internet Archive. London; Boston : Allen & Unwin. pp. 142–143. ISBN 978-0-04-382027-8.
  7. 1 2 건우, 이 (2019-04-18). "[실록! 한국경제]⑨ "무너진 신화"… 율산(栗山)". Blockmedia (in Korean (South Korea)). Archived from the original on 2022-10-01. Retrieved 2026-08-11.
  8. ↑ "[조세금융신문] [한국경제 비화 ㊶]율산실업 신선호 사건". www.tfmedia.co.kr (in Korean). Retrieved 2026-08-11.
  9. ↑ "률산 신선호씨구속". 매일경제 (in Korean). 1979-04-04. Retrieved 2025-12-28.
  10. ↑ Times, Jae Noon Shim Special to The New York (1979-04-19). "Seoul Plans Continued Export Aid". The New York Times. ISSN 0362-4331. Retrieved 2026-08-16.
  11. ↑ Shim, Jae Hoon (1979-04-18). "Korea's Yulsan Scandal Unfolds". The New York Times. Section D, Page 1.
  12. ↑ Bun Woong Kim (1985-01-01). Administrative Dynamics and Development: The Korean Experience. Internet Archive. Kyobo. p. 27. ISBN 9781563243875.
  13. ↑ "3 Korea Bank. Chiefs Are Ousted". The New York Times. 1979-04-14. ISSN 0362-4331. Retrieved 2026-08-16.
  14. ↑ 박, 현 (2025-07-03). "[재벌, 어제와 오늘⑯-효성그룹] 인수합병으로 성장한 국내 대표 화학섬유 기업...지주사 체제로 글로벌시장 '정조준'". Newswatch.
  15. ↑ "栗山(율산)사건 銀行(은행)파동 對外信用(대외신용)에 큰衝擊(충격)" [Yulsan Incident Banking Crisis Major Shock to External Credit]. The Dong-A Ilbo (in Korean (South Korea)). 1979-05-02. p. 1. Retrieved 2026-10-10.
  16. ↑ Utterstrom, Lennart (1979-05-04). "When a whizz-kid crashes". Birmingham Evening Mail. p. 19. Retrieved 2025-12-28.
  17. ↑ "율산산하기업 분산매각|부채 1,550억…다팔아도 모자라" [Yulsan Group's Subsidiaries Sold Off in Pieces Debt of 155 Billion Won... Even Selling Everything Won't Cover It]. JoongAng Ilbo (in Korean (South Korea)). 1979-04-06. Retrieved 2025-12-29.
  18. ↑ 광주군 (1978). 광주통계연보 제18회 = STATISTICAL YEAR BOOK [Gwangju Statistical Yearbook No. 18 = STATISTICAL YEARBOOK] (in Korean (South Korea)). p. 72.
  19. ↑ 상공부 (1978-02-11). "상공부공고 제78-9호" [Ministry of Commerce and Industry Public Notice No. 78-9]. 관보 (in Korean (South Korea)) (7874).
  20. ↑ "栗山그룹 既成服업계 진출" [Yulsan Group Enters Ready-made Clothing Industry]. Maeil Business Newspaper (in Korean (South Korea)). 1978-08-23. p. 5. Retrieved 2026-09-02.
  21. ↑ "栗山그룹 技能工 양성계획 연간7천名 규모" [Yulsan Group plans to train skilled workers — 7,000 per year]. Maeil Business Newspaper (in Korean (South Korea)). 1978-02-23. p. 5. Retrieved 2026-10-23.