The decision places the chairman atop both the group's retail backbone and the unit driving its push into artificial intelligence infrastructure, following a controversy at its Starbucks Korea operation that has forced a wider management overhaul.
Shinsegae said Monday that Chung has been designated as co-CEO at both companies, though neither appointment is yet final. E-mart named him a co-CEO nominee at its regular executive reshuffle and will formally confirm the role at next year's shareholder meeting.
Shinsegae Property will convene its board to recommend him as a registered director, seek shareholder approval, then reconvene the board to appoint him co-CEO, completing the process.
Chung cast the move as accepting responsibility. He said he takes seriously the market's demand for clear accountability in running the companies and pledged to submit himself to the evaluation of the board and shareholders as chief executive. The pledge follows a marketing controversy at Starbucks Korea, in which E-mart, as the chain's largest shareholder, bears responsibility for its board composition and operations.
Shinsegae Property carries the strategic weight in the decision. The unit operates landmark developments such as Starfield Cheongna and will manage the groundwork, including site acquisition, for an AI data center the group plans to build under a partnership signed in March with Reflection AI of the U.S.
That agreement, a strategic MOU to build what the companies call a South Korean sovereign AI factory, targets a 250-megawatt facility that would rank as the country's largest, with a joint venture to be established within the year and construction proceeding in phases. Chung signed the MOU personally in March, and by taking the Shinsegae Property helm he assumes responsibility for both the current portfolio and its future growth bets.
The Reflection AI tie-up gives the plan credibility beyond the announcement. The U.S. startup raised US$2 billion at an $8 billion valuation last October, with Nvidia among its backers, an investment that signals both technical standing and a route to securing the graphics chips such facilities demand. Shinsegae has since halted separate collaboration talks with OpenAI to concentrate on the partnership.
Alongside Chung, Shinsegae Property named Lee Hyung-cheon, a former development chief, as professional co-CEO. Lee will handle immediate priorities such as the Starfield Cheongna build and day-to-day operations, while Chung oversees medium- and long-term vision and efforts to lift corporate value.
Coffee chain Starbucks Korea, the source of the crisis that helped prompt the shake-up, named Shin Dong-woo, a support division head at Shinsegae Property, as its new chief, tasked with strengthening internal controls and drawing up a turnaround plan to restore trust.
With the latest appointments, Chung will sit on the boards of three affiliates, having been named inaugural board chairman last year of AG Global Holdings, the joint venture between Shinsegae and Alibaba International.
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