Korean Air unloads assets as Chos feudKorean Air Lines is unloading assets as the current chairman fights a boardroom coup instigated by a sibling.
The board of Korean Air Lines voted today to sell the operator of the Wangsan Marina Resort in Incheon and a large plot of land in Songhyeon-dong in Jongno District, central Seoul.
It also passed a number of resolutions that could improve the independence of the board and the operations of the carrier.
Founded in 2011, Wangsan Leisure Development, the operator of the resort that is up for sale, is wholly owned by the carrier. The first CEO of the company was Cho Hyun-ah, the sister of Chairman Cho Won-tae, who is challenging his control.
“Wangsan Leisure Development runs Wangsan Marina Resort, which was established in 2016, and Korean Air owns a 100 percent stake in the operator,” Korean Air Lines said in a statement.
“Korean Air aims to complete the sell-off this year by undertaking with relevant procedures, including [the] selection of [an] adviser and issuing a notice of sale,” it said.
Wangsan Leisure Development recorded a 2.3 billion won ($1.95 million) operating loss in 2018, the latest data available from the Financial Supervisory Service.
Korean Air Lines and Hanjin KAL, which owns 30 percent of the airline, have invested a total of 134.3 billion won in the development company.
The airline described the resort business as a non-core asset, but it is also a business that has been the focus of Cho Hyun-ah.
The chairman’s sister formed an alliance last month with the KCGI and Bando Engineering & Construction to challenge Cho Won-tae for control. She was stripped of her position at the airline for endangering the operation of a Korean Air aircraft in New York in 2014.
The Songhyeon-dong property is 36,642 square meters (394,411 square feet) in size and has a 605-square-meter structure.
Korean Air Lines once planned to develop a high-end hotel on the site.
The board passed a motion requiring all members of the nominating committee, which selects outside directors, to come from outside the company. It also established an advisory panel of outside directors tasked with reviewing important decisions.
The group challenging the chairman is demanding that a business professional replace Cho Won-tae, who serves as chairman and CEO of Korean Air Lines, chairman of Hanjin KAL and chairman of Hanjin Group.
BY PARK EUN-JEE [firstname.lastname@example.org]