KCGI ups its stake in Hanjin KAL

KCGI has increased its stake in Hanjin KAL as it works with allies to take control of the company and install professional managers.

Hanjin KAL owns 30 percent of Korea Air Lines.

The fund acquired an additional 0.55 percent of Hanjin KAL, according to a release issued via the DART depository of corporate filings maintained by the Financial Supervisory Services (FSS).

The latest purchase takes KCGI’s total holdings in the company as 17.68 percent.

Cho Hyun-ah, who is the sister of Hanjin KAL chairman Cho Won-tae, Bando Construction & Engineering and KCGI are working together to gain control.

Combined, they own 37.62 percent of the company.

Cho Won-tae and allies control 28.25 percent of the company.

Lee Myung-hee - Cho Won-tae’s mother - Cho Hyun-min - Cho Won-tae’s sister - and Kakao are supporting the chairman. Employees of Korean Air Lines are also backing the chairman.

Delta Airlines owns 11 percent and could also support Cho Won-tae as he battles insurgent shareholders.

The KCGI coalition plans to recommend new directors and call for the adoption of electronic voting.

The alliance has issued a series of statements criticizing the current leadership, putting pressure on the key shareholders that may support Cho Won-tae.

“We believe that Delta Air Lines will keep its reputation and make a wise decision for the future of the Hanjin Group,” the alliance said in a statement released on Monday.

In trading Tuesday, Hanjin KAL shares rose 20.06 percent to an all-time high of 80,800 won. Korean Air Lines rose 0.45 percent to 22,400 won, near all-time lows.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]