Choi expresses regret in day 2 of Hanjin hearing

Industry

Published: 09 Sep. 2016, 21:06

Choi expresses regret in day 2 of Hanjin hearing

Hyundai Merchant Marine’s 4000 TEU (20-foot equivalent) unit container ship Hyundai Forward arrives at the Busan New Port Friday to ease logistics disturbances caused by Hanjin Shipping’s absence. The ship will stop by Gwangyang, South Jeolla to load more containers and then head to Los Angeles by Sept. 20. [SONG BONG-GEUN]

A National Assembly hearing to reprimand those involved in the fall of the nation’s shipbuilding and shipping industries went into its second-day on Friday.

Major witnesses took part, including Choi Eun-young, former chairwoman of Hanjin Shipping.

“I feel deep moral responsibility as the former chairperson,” Choi said. “I will find ways to give back to society in any format as soon as possible.”

Choi swept away tears, but no mercy was granted during the hearing as lawmakers from both ruling and opposition parties pointed to her moral hazard as former head of the company.

Choi Eun-young, former chairwoman of Hanjin Shipping, sheds tears during the Friday hearing. [NEWSIS]

Choi, who took over management of the shipper after her husband, Cho Su-ho, suddenly died in 2006, has been implicated as the major contributor to Hanjin Shipping’s troubles. During her term as chairwoman from 2007 until 2014, the debt ratio of the shipper soared from 405 percent to 1,460 percent, but she still took core subsidiaries of the shipper such as the IT service provider CyberLogitech and the ship maintenance company Eusu-SM when she abdicated her post to Hanjin Group Chairman Cho Yang-ho.

Criticism resurfaced as she sold all her shares in Hanjin Shipping as well as those her daughters owned, or 970,000 shares total, to save losses of around 1 billion won ($990 million) just three days before the shipper submitted a conditional turnaround plan in April. She is undergoing trial for allegedly using insider information to minimize losses.

As investigations continued, it was also revealed that Choi owns a luxury yacht, Ferreti 780, which is known to cost around 10 billion won, through Eusu-SM. Eusu-SM was also said to have brought in 14 billion won annually as it owns the headquarters building for Hanjin Shipping.

Lawmaker Kim Kwan-young of the minor opposition People’s Party compared Choi’s actions to those of “the captain of Sewol ferry who abandoned the sinking ship,” and other lawmakers, including Min Byung-doo of the main opposition Minjoo Party of Korea, asked whether Choi will cough up her own money to save the troubled shipper. But Choi avoided giving a definite answer.

“I didn’t have a chance to think [about handing in private money] under investigation by the prosecution,” she said, “but will think through if time is granted.”

According to Choi on Friday, her private assets amount to 35 to 40 billion won, considering her 18 percent stake in Eusu-sm with market capitalization of 190 billion won, but she later conceded that she has about a 40-percent stake in the company when considering those owned by her daughters and affiliated persons, as well.

To relieve the situation, Hyundai Merchant Marine container ship “Hyundai Forward” left Busan New Port today to stop by Gwangyang and then head to Los Angeles.

Hanjin Group also announced that the 40 billion won funding from the group Chairman Cho Yang-ho’s own coffers is undergoing legal progress to be delivered by this coming Tuesday.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]