Captain Choi of the TitanicProsecutors discovered evidence that Hanjin Shipping Co’s former chairwoman Choi Eun-young used insider information to dispose all of her and her daughters’ remaining shares in the troubled shipping company before the management applied for creditors’ workout.
A joint investigation team at southern Seoul district prosecution office found out that Choi sold off her shareholdings in Hanjin Shipping and her two daughters after she talked to the company’s outside consultant on April 6.
From the materials they seized from her office and home, prosecutors believe Choi had known that the company planned to seek for creditors’ workout arrangement that would place the shipping firm under joint management with creditors.
Choi is the widow of Hanjin Group Chairman Cho Yang-ho’s younger brother Su-ho. She ran the shipping company from 2007 a year after her husband died and handed over management control to his brother-in-law Cho Yang-ho in 2014 after her expansion policy damaged the company’s balance sheet.
Financial regulators referred the case to the prosecution after suspecting illegal stock trade behind Choi’s unloading of combined 0.39 percent stake in Hanjin Shipping worth around 2.7 billion won ($2.3 million) running up to a few days before Hanjin Shipping sought creditors’ relief.
Authorities estimate Choi and her daughters saved about 1 billion won by selling their shares ahead. Shippers and shipbuilders are expected to shed at least 30,000 from work force in the process of restructuring.
The chaebol owners are responsible for mismanaging their companies. But selling their shares to avoid losses by using access to management decisions is utterly shameful.
Choi, as former captain of the ship, had jumped off the boat to save herself without any care for her crew and passengers. Hanjin Shipping stock prices have lost nearly 40 percent after the company sough workout from creditors.
Choi maintains that she sold the shares to pay off the inheritance tax. But she would not be able to avoid punishment for disrespecting financial order. Prosecutors must investigate who had provided the information to Choi. The company faces restructuring and possible bailout with tax funds. The funding cannot be justified without accurate probe into insider trading.
JoongAng Ilbo, May 14, Page 26
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