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Hanjin KAL recommends heir apparent as director ahead of vote showdown

All News 18:05 March 04, 2020

By Choi Kyong-ae

SEOUL, March 4 (Yonhap) -- Hanjin KAL Corp., the holding company of logistics-centered Hanjin Group, recommended the group's heir apparent as a member of its boardroom ahead of a vote showdown this month amid a family feud over the throne of the group.

Hanjin KAL Corp., which owns shares in Korean Air Lines Co., said its board members have suggested Hanjin Group Chairman Cho Won-tae and Korean Air Chief Financial Officer Ha Eun-yong as executive directors at the holding firm, the company said in a statement.

"The recommendations are aimed at seeking stability in management structure under the chairman's leadership and improving the group's financial status amid growing uncertainties," the statement said.

This image shows Hanjin Group's inheritors Cho Hyun-ah (L) and Cho Won-tae, chairman of the group and its flagship Korean Air Lines. (Yonhap)

One of the three director posts remains vacant following former Chairman Cho Yang-ho's death in April last year.

The suggestions for the two executive director posts are subject to approval at a shareholder meeting on March 27.

Hanjin KAL directors have also proposed doubling the number of outside directors to eight in a bid to enhance governance structure and secure transparency in management decisions.

Since taking over the helm of Hanjin Group last April, Chairman Cho Won-tae, 44, has been involved in a family feud following a rebellion led by his older sister Hyun-ah over control of the airline-to-logistics conglomerate.

Hyun-ah, 45, known for her "nut rage" incident in 2014, formed an alliance with the homegrown Korea Corporate Governance Improvement (KCGI) fund and local builder Bando Engineering & Construction Co. in January to challenge her brother's management of the group.

Hyun-ah has been at loggerheads with her brother Won-tae and other family members over the way of managing the airline-to-logistics conglomerate.

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

KCGI said the three-party alliance's combined stake in Hanjin KAL rose to 37.8 percent from 32.06 percent as of Feb. 20.

The stake is higher than the 33.45 percent collectively held by Won-tae, his mother, younger sister, related parties, Delta Air and the country's leading messaging app, Kakao Corp.

The alliance can exercise voting rights over a 31.98 percent stake they purchased last year at this year's shareholders' meeting, Korean Air said.

On Wednesday, Hanjin KAL jumped 4.8 percent to 84,700 won, Korean Air soared 7.1 percent to 24,000 won and its budget carrier Jin Air Co. climbed 4.9 percent to 12,850 won, all outperforming the broader KOSPI's 2.2 percent gain.

The airline stocks got a boost as investors expect the Hyun-ah alliance's challenge to the current leadership to help improve the group's governance structure, analysts said.


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