Hanwha says CEO’s release will be reliefHanwha Group, the nation’s 10th-largest conglomerate, is poised to speed up investments and book more overseas orders after Kim Seung-youn, its chairman, became a free man.
Kim, who was convicted of fraud and embezzlement, can go back to work after the Seoul High Court Tuesday gave him a three-year prison term, suspended for five years. Although the 62-year-old tycoon was ordered to pay a 5 billion won ($4.6 million) fine and carry out 300 hours of community service, he is no longer threatened with life behind bars. Hanwha Group said Kim cannot return to management quickly because he needs his health to recover.
The chairman was receiving treatment at Seoul National University Hospital for diabetes, lung disease and bipolar disorder. Because of his health problems, Kim was granted suspension of detention and was released from jail in January 2013. Industry insiders expect it could take at least a year for Kim to go back to the office.
But Hanwha Group is hyping the return of Kim after his legal travails.
Hanwha has been run by an “emergency council” since last April. The council is led by group veterans and takes care of three sectors: finance, manufacturing and services. But core decisions such as on investments were stalled.
After three years of Kim’s absence due to his legal woes, Hanwha said it has faced problems winning additional orders from the Bismayah city project in Iraq after its affiliate Hanwha Engineering and Construction won an $8 billion deal in 2012, the largest construction order landed by a Korean company.
Beginning with the Bismayah project, Hanwha was expecting to win more construction orders from Iraq, which is reconstructing itself after war.
“Chairman Kim was leading the project by meeting Iraqi Prime Minister Nouri Kamil Al-Maliki, but since his absence, the speed of the process is not like old days,” a spokesman from Hanwha Group said.
Besides construction projects, industry observers expect Kim’s return to give a boost to Hanwha’s solar power energy business. Hanwha said that solar power is an area that relies on overseas orders and getting government subsidies is critical and that the chairman’s role is important for both.
Hanwha expects the global solar power market to grow more than 20 percent this year and wants to secure more orders.
The solar business, Hanwha Q Cells, is currently led by Kim Dong-kwan, the eldest son and heir apparent of Kim, but his experience and management skills are still short of his father’s.
BY joo kyung-don [firstname.lastname@example.org]