Cho family split inherited stake in Hanjin KalThe Hanjin Group owner family has jointly inherited late chairman Cho Yang-ho’s stake in the group’s holding unit Hanjin Kal and paid off part of the required inheritance tax.
While the process is a big step toward securing the owner family’s grip over the transport conglomerate, industry insiders say there is still a chance of a management dispute between the owner family members due to the small difference between their holdings.
Hanjin Kal announced through a corporate filing Wednesday that the late Cho’s 17.7 percent stake in the company has been passed on to his wife Lee Myung-hee and three children in a 1.5:1:1:1 ratio, following the ratio set by local law.
Lee now has a 5.27 percent share in Hanjin Kal. She did not previously own any shares in the holding unit. Hanjin Kal Chairman Cho Won-tae, the late Cho’s only son, increased his share from 2.32 percent to 6.46 percent. Cho Hyun-ah, the eldest of the three siblings, increased her share from 2.29 percent to 6.43 percent while Cho Hyun-min, the youngest of the three, increased her share from 2.27 to 6.42 percent.
When considering common shares with voting rights, Lee holds a 5.31 percent stake while Cho Won-tae holds 6.52 percent, Cho Hyun-ah 6.49 percent and Cho Hyun-min 6.47 percent.
The inheritance process was completed slightly before the legal deadline. Under Korean law, inheritors need to report on inheritance tax by the end of the sixth month after a death. As Cho Yang-ho passed away in April, Thursday was the deadline.
Industry insiders speculate that the family members have to pay some 270 billion won ($232 million) in inheritance tax, though Hanjin Kal has not confirmed the number. The family will be paying the sum off over five years, sources say. For inheritance tax over 20 million won, taxpayers are allowed to pay in installments. On Tuesday, the first installment was paid.
The Cho family will first use the late Cho’s severance pay to cover taxes, before resorting to loans. As the family sold off the late chairman’s 6.87 percent stake in Hanjin Transportation to GS Home Shopping last week for 25 billion won, that money could also be used.
While the inheritance makes Cho Won-tae - and related people - the top shareholder of Hanjin Kal, the slim difference in shares between the three siblings could potentially lead to management disputes in the future.
Cho Hyun-min, an American national who was forced to step down from all her roles after making headlines for throwing drinks at employees in a fit of rage during a business meeting last year, has already made a comeback in June. She was reinstated as a senior vice president at Hanjin Kal and as executive vice president of Jungseok Enterprise, a building management arm under the group.
Cho Hyun-ah, notorious for her nut rage scandal, briefly returned to management last year before being forced to step down again. She currently holds no managerial role.
BY KIM JEE-HEE [firstname.lastname@example.org]