Woongjin paid double for a builder — then guaranteed over ₩1 trillion of its debt

Woongjin Group grew from 70 million won in starting capital over 32 years into a top-30 Korean conglomerate, with businesses in publishing, education, food, energy and consumer products. In 2007, it acquired Keukdong Construction for 660 billion won — more than double what the industry had expected. The acquisition was meant to diversify the group into construction and infrastructure.

The timing was catastrophic. South Korea's real estate market entered a prolonged downturn, and Keukdong Construction's finances deteriorated. Woongjin poured over 400 billion won in direct support into the subsidiary and provided more than 1 trillion won in joint guarantees on its debt. The group's solar energy business, Woongjin Energy, also declined, removing another expected growth engine.

On 25 September 2012, Keukdong Construction defaulted on 15 billion won in bills that came due. The next day, both Keukdong Construction and Woongjin Holdings, the group's holding company, applied for court receivership. Woongjin sold its profitable consumer unit Woongjin Coway in a rescue attempt, but the liquidity crisis was beyond a single divestiture.

The case became known in Korean business media as a textbook 'winner's curse' — an acquisition priced for optimism that became a chain of obligations dragging the acquirer down. Controversy deepened when it emerged that chairman Yoon Seok-geum's wife had sold approximately 40,000 shares of Woongjin ThinkBig just days before the receivership filing.