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Korean Air union opposes heiress' management plan

All News 15:41 February 14, 2020

SEOUL, Feb. 14 (Yonhap) -- The union of Korean Air Lines Co. voiced its opposition Friday to a proposal to invite a former SK Group executive as a professional manager to lead the national flag carrier and its parent Hanjin Group.

In a statement released Friday, the 10,000-strong union said it will take all possible measures to block the plan proposed by a three-member coalition led by Hanjin heiress Cho Hyun-ah.

On Thursday, Hyun-ah, widely known for the "nut rage" incident in 2014, proposed Kim Shin-bae, who served as executive vice chairman at SK Group and president at SK Telecom Co., as a professional manager to lead the airline-focused conglomerate amid an escalating family feud over the throne of the conglomerate.

This composite file photo shows (from L) Hanjin Group heiress Cho Hyun-ah, KCGI CEO Kang Sung-boo and Bando Engineering & Construction Co. Chairman Kwon Hong-sa. (Yonhap)

"The person recommended by the three-member coalition does not know anything about the airline industry or will play puppet and rubber stamp for them," the statement said.

Hyun-ah, 45, the eldest daughter of late Hanjin Group and Korean Air Chairman Cho Yang-ho, recently partnered with local activist fund Korea Corporate Governance Improvement (KCGI) and midsized builder Bando Engineering & Construction Co. in an attempt to replace her younger brother, Won-tae, chairman of Hanjin Group and the national flag carrier, with a professional manager.

They have argued that inviting a professional manager will help improve the group's management, financial status and shareholder value.

In the statement released through their leading legal counsel, they recommended Kim Shin-bae, who served as executive vice chairman at SK Group and president at SK Telecom Co., as the professional manager of Hanjin Group.

They said they have made a proposal that is "the first step to normalize" Hanjin Group ahead of a shareholders meeting of Hanjin KAL, the holding company of the group, on March 25.

For 2019, Korean Air's net losses widened to 624.87 billion won (US$529 million) from 185.65 billion won a year earlier.

A sharp decline in travel demand on Japanese and Hong Kong routes and decreasing cargo-carrying volumes amid a slowing global economy cut into the bottomline.


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