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(2nd LD) Hanjin chief offers apology to mend simmering family feud

All News 21:01 December 30, 2019

(ATTN: ADDS background in 5th para; UPDATES stock prices in 14th para)
By Kim Kwang-tae

SEOUL, Dec. 30 (Yonhap) -- Hanjin Group Chairman Cho Won-tae and his mother offered a public apology Monday for what could be seen as a family feud over the control of South Korea's largest logistics conglomerate.

The statement came two days after South Korean media reported Cho's big argument with his mother at her house in Seoul on Christmas over how to run the logistics conglomerate.

"We are deeply sorry for causing concerns to many people over an unsavory incident on Christmas," Cho and his mother, Lee Myung-hee, said in a joint statement.

This image, captured from the website of Hanjin KAL, shows the logo of Hanjin Group's holding company. (PHOTO NOT FOR SALE) (Yonhap)

This image, captured from the website of Hanjin KAL, shows the logo of Hanjin Group's holding company. (PHOTO NOT FOR SALE) (Yonhap)

Cho is said to have complained that Lee gave tacit approval to the challenge by Cho's elder sister, Cho Hyun-ah, citing media reports. Cho Hyun-ah accused her younger brother of not following their late father's dying wish that the family should cooperate and run the business together.

In April, Cho Yang-ho died at 70 from a lung disease in the United States. The death followed his ouster from the company's board at a shareholder meeting a month earlier amid a string of probes against him and his family for using their positions to mistreat subordinates and mounting calls for change in leadership.

It's unclear exactly what transpired, but a vase in the house's living room was shattered as the late chairman's only son Won-tae lost his temper, local reports claimed.

Cho immediately offered a deep apology to his mother, and the mother accepted it, according to the statement.

Cho and Lee also said they will uphold the dying wish of late group Chairman Cho Yang-ho through family reconciliation.

Cho Won-tae took the helm of Hanjin Group after his father's death, but he is in a desperate need of family support, especially his mother's, to get elected again as chairman and CEO of Hanjin KAL Corp., the group's holding company.

Lee owns a 5.31 percent stake in Hanjin KAL, giving her the casting vote on key issues at a shareholder meeting of the group's holding company in March.

Currently, Won-tae holds the largest stake among his family members with a 6.52 percent stake in Hanjin KAL, with Hyun-ah and her younger sister controlling 6.49 percent sand 6.47 percent stake in the holding firm, respectively.

A chart on Hanjin KAL's ownership structure (Yonhap)

Local activist fund Korea Corporate Governance Improvement (KCGI) has jacked up its stake in Hanjin KAL to 17.29 percent from the previous 15.98 percent, ratcheting up its battle with the logistics conglomerate for an improvement in governance structure.

KCGI Chief Executive Kang Sung-boo said in a text message to Yonhap News Agency on Sunday night that he had "no stance" on the family feud.

On Monday, Hanjin KAL rose 0.5 percent to 40,000 won and Korean Air gained 0.7 percent to 28,500 won, outperforming the broader KOSPI's 0.3 percent loss.

Hyun-ah gained global notoriety for the "nut rage" incident in 2014. She forced a plane back to the boarding gate at New York's John F. Kennedy International Airport because she was upset with the way her nuts were served -- in an unopened bag instead of on a plate.

Hyun-ah, former vice president of the group's flagship Korean Air, made a comeback as the head of KAL Hotel Network Co., the hotel affiliate of the logistics giant, in March 2018.

But Cho Hyun-ah was dismissed from the post a month later, along with Cho Hyun-min, who was accused of having thrown water in the face of an ad agency manager during a meeting in March 2018.

In June, Cho Hyun-min returned as senior vice president and chief marketing officer of the holding company.


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