English translation of the original Korean report. Images and source documents may contain Korean text.

The board of Coca-Cola Beverage, a subsidiary of LG H&H, was found to have received a report on ‘Matters Concerning the Delegation of Management Responsibility Under the Serious Accidents Punishment Act’ 10 months before a subcontractor’s worker fell to his death.

The board is chaired by Lee Hee-gon, CEO of Coca-Cola Beverage. The contents of the delegation report, including who received which powers, have not been disclosed. Courts have generally regarded the CEO as the person responsible for management under the law and have recognized delegated authority to other executives only when final decision-making powers over safety organizations, personnel and budgets were actually transferred.

According to the Financial Supervisory Service’s Electronic Disclosure System on the 12th, LG H&H disclosed that day that a serious industrial accident had occurred at the Changwon Logistics Center of its subsidiary Coca-Cola Beverage. At around 1 p.m. on the 11th, a worker employed by an outside construction contractor reportedly fell approximately 6.7 meters to his death while repairing the roof. The Yangsan Branch of the Busan Regional Employment and Labor Office issued a partial work suspension order on the day of the accident.

According to the corporate group status report submitted by Coca-Cola Beverage under the Fair Trade Act, the company’s board approved its ‘Industrial Safety and Health Plan’ on January 27 this year while receiving a report on ‘Matters Concerning the Delegation of Management Responsibility Under the Serious Accidents Punishment Act.’ This was the second such report on the delegation of management responsibility, following one in 2023.

■ Fatal Accident 10 Months After Delegation Report…’Who Is the Person Responsible for Management?’

The Serious Accidents Punishment Act defines a person responsible for management as someone who represents and oversees a business, or someone who performs equivalent safety and health duties. When a company exercises substantive operational and managerial control over a workplace, the person responsible for management has a duty to ensure safety and health even if a subcontractor’s worker dies there. If a fatal accident occurs as a result of a failure to fulfill those obligations, the person responsible for management may face imprisonment for at least one year or a fine of up to 1 billion won, while the corporation may face a fine of up to 5 billion won.

Whether responsibility shifts when a CEO delegates authority to a Chief Safety Officer (CSO) has long been disputed in court. In December last year, the Yeoju Branch of the Suwon District Court acquitted a company CEO at the first-instance trial after the CEO had delegated all final decision-making authority over safety and health matters to a CSO. By contrast, on the 20th of last month, the Supreme Court upheld a lower court ruling in the lithium battery factory fire case in Hwaseong, Gyeonggi Province, that did not recognize the head of overall operations, who lacked final decision-making authority over safety organizations and budgets, as the person responsible for safety and health. The CEO’s four-year prison sentence was also finalized.

Lee previously served as head of LG H&H’s Vietnam subsidiary and as managing director overseeing refreshment sales at Coca-Cola Beverage. He became an inside director in March 2022 and CEO in March 2024. He currently also serves as head of the Refreshment Business Division, with the rank of managing director, and holds directorships at HAITAI htb, Hankook Beverage and Gowoonnuri.

Coca-Cola Beverage’s board consists of three inside directors, including CEO Lee, and two other non-executive directors. The non-executive directors are Jang Seung-se, Vice President and Head of the Chemical Team at LG Corp., and Matthew Robert Sisk, Vice President of Finance at Coca-Cola Japan. The company has no outside directors or committees within its board.

LG H&H holds a 90% stake in Coca-Cola Beverage, while European Refreshments, an Irish subsidiary of The Coca-Cola Company (TCCC), the U.S.-based parent company, owns the remaining 10%. LG H&H’s largest shareholder is the holding company LG Corp., with a 35.49% stake, while LG Corp.’s largest shareholder is Koo Kwang-mo, Chairman of LG Group, with a 16.60% stake.

Coca-Cola Beverage is a key subsidiary of LG H&H, having recorded operating profit of 151.1 billion won last year. LG H&H stated, ‘The victim was not an employee of our subsidiary, but the accident occurred at the subsidiary’s workplace,’ adding that it would take follow-up measures based on the findings of the relevant authorities’ investigations. The work suspension can be lifted only after the company completes safety measures, applies for the order to be lifted and undergoes a review by a Ministry of Employment and Labor committee.