Hanjin’s Cho tries to boost family’s controlHanjin Group is in the final stage of converting its governance structure to a holding company, an attempt to strengthen the leadership of the group chairman, Cho Yang-ho.
The process has taken the airliner conglomerate two years.
Hanjin Kal Corporation, the de facto holding company of Hanjin Group, announced Thursday that it will be absorbing the investment unit of Jungseok Enterprise, a property investment and management firm.
Hanjin Kal said the decision was made at its board meeting.
In the process, a 21.63 percent stake that Jungseok Enterprise has in Hanjin Transportation will be owned by Hanjin Kal once the merger is completed. With the stake transfer, Hanjin Transportation will now be an affiliate of the holding company.
The remaining Jungseok Enterprise will focus on property, leasing and building management and will remain as an affiliate.
The merger is expected to not only simplify the complicated investment relations between the affiliates and the owning family but also strengthen the chairman’s governance control. Hajin Transportation now owns a majority of Hanjin Kal, which then owns the stake in Jungseok Enterprise, which owns Hanjin Transportation. After the merger, the owning family will have control over the holding company, which will then control other affiliates including Jungseok Enterprise, Korean Air and Hanjin Transport.
Cho, who owns a 27.21 percent stake of Jungseok Enterprise, will receive shares of Hanjin Kal as part of the merger. According to an executive of Hanjin Group, the stake Cho has in Hanjin Kal will be increased from 15.63 percent to 18 percent or higher.
BY KWON SANG-SOO [firstname.lastname@example.org]
with the Korea JoongAng Daily
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