The power struggle over Hanjin KAL, the holding company of Hanjin Group, seemed to settle at last as the three-way alliance of an estranged sister of the Korean Air chairman, an activist fund and a builder officially disbanded, industry data showed Friday.
In a regulatory filing, Grace Holdings, which is a special purpose firm of the activist fund Korea Corporate Government Improvement, Bando Engineering and Construction and Cho Hyun-ah said they have ended their agreement for joint ownership of their stakes in Hanjin KAL, the holding company of Hanjin Group. Cho is the elder sister of incumbent Korean Air Chairman Cho Won-tae and the oldest of late Chairman Cho Yang-ho’s three children.
Their partnership was formed in early 2020 to oppose the appointment of Cho Won-tae to the top post of national flag carrier Korean Air, demanding that the company invite a professional manager to improve governance, financial status and shareholder value.
Grace Holdings holds 17.54 percent of shares in Hanjin KAL, Cho has 5.71 percent and Bando Engineering & Construction holds 17.15 percent. The three hold a combined 40.4 percent of the Hanjin KAL stock.
The consortium’s attempt to increase their power over Hanjin Group apparently came to an end after the state-owned Korea Development Bank came to side with Cho Won-tae, as Korean Air decided to buy out its debt-ridden rival Asiana Airlines.
As Asiana’s main creditor, KDB acquired 10.66 percent stake in Hanjin KAL to cooperate with Cho Won-tae, who holds 36.66 percent shares.
Following the defeat, the alliance did not submit a shareholder proposal for its shareholders meeting in March, and cast blank ballots for all agendas.
In a statement Friday, KCGI said the alliance has sought to improve the “underdeveloped” governance system of Hanjin Group, and that they will still make their voices heard when needed, for development of Hanjin Group.
“With KDB taking part, we believe we have secured the minimum measures to monitor and keep in check of the Hanjin Group’s major stockholder and the executives, who were autonomously wielding power,” KCGI said.
“The joint stock possession agreement has ended, but we will crack the whip on management executives whenever there needs actions to improve the governance system and increase corporate value for Hanjin Group.”
By Jo He-rim (firstname.lastname@example.org