Seo Jung-jin used to borrow money from loan sharks, pledging his organs to get much needed funds for his upstart drugmaker. Now he’s the second-richest person in South Korea, trailing just Samsung Electronics Co.’s chairman.
The Celltrion Inc. founder’s fortune has swelled to $10 billion as shares of his company, which is developing a Covid-19 treatment, almost doubled this year.
His rise is extraordinary and represents a shift in the country’s business elite. While family-run conglomerates touch almost every aspect of life in South Korea, more corporate founders making fortunes in non-traditional sectors like Seo have emerged. As the coronavirus pandemic upended people’s lives, the trend has only become more pronounced, with the chaebols losing more of their luster.
“Boundaries between industries are getting blurry,” said Park Ju-gun, president of corporate watchdog CEOScore in Seoul. “Those who sit still with traditional businesses don’t cope well with the change. The pandemic has accelerated the trend.”
Born to a family who sold coal briquettes, Seo, 62, worked as a taxi driver to get himself through Konkuk University in Seoul. After studying industrial engineering, he rose through the ranks of Daewoo Motor Co., before losing his job when the automaker went bust following the Asian financial crisis. In 2000, he set up a company called Nexol with former Daewoo colleagues to explore business opportunities. It eventually became what is now Celltrion’s global marketing affiliate, Celltrion Healthcare Co.
He got interested in biosimilars — medical products similar to drugs that are already approved — in the early 2000s, betting that aging societies will need alternatives to costly medicines. Celltrion, started in 2002, ran into financial trouble in 2004 after the failure of some vaccine clinical trials, prompting Seo to go to loan sharks, according to a Financial Times article in 2012 that a Celltrion spokesman confirmed. The company is now a giant that develops biosimilars such as monoclonal antibody Remsima of Johnson & Johnson’s Remicade.
Like in most of the rest of the world, Korean tech and pharma stocks have soared in 2020, with Celltrion up 75%. The stock has risen almost fivefold in the past five years.
Seo’s net worth is based on his holdings in Celltrion and Celltrion Healthcare. Shares he pledged as collateral were removed from the calculation. He declined an interview for this story, and a company representative declined to comment on his net worth.
Last year, Seo said he would step down from management in 2020, explaining that remaining the chairman beyond retirement age would make the company a “kingdom,” according to an interview with local newspaper Hankyoreh.
“The chairman is a title, not a king,” he said.
While South Korea’s wealthiest person remains Samsung Electronics Chairman Lee Kun-hee, the families behind some of the largest conglomerates have dropped from their rankings on the Bloomberg Billionaires Index of the world’s 500 richest people.
Hyundai Motor Group’s Mong-Koo Chung and SK Group’s Chey Tae-won, as well as cosmetic maker Amorepacific Group’s Suh Kyung-bae were among the nation’s top five wealthiest people five years ago. They’ve since lost more than $9 billion combined.
Newcomers such as Seo and tech entrepreneurs have replaced them.
Gamemaker Nexon Co.’s Kim Jung-ju has become Korea’s third-richest person with a $7.8 billion fortune, while Brian Kim, the founder of social-messaging app Kakao Corp., entered the wealth ranking for the first time this year. His company’s businesses encompass ride-hailing and payment services, and its shares have more than doubled since a March low as limited person-to-person interactions during the pandemic have increased demand for its services. He has the nation’s fifth-biggest fortune, $5.1 billion, just after Samsung Electronics’ Lee Jae-yong.
It’s only in certain sectors like biopharma and tech that the new rich can flourish as traditional industries require huge capital to break into, according to CEOScore’s Park. That’s why inherited wealth will not go away, he added.