Hanjin heiress loses one of her chosen directorsA board director nominee proposed by Hanjin Group heiress Cho Hyun-ah flipped sides and pledged support to her younger brother Cho Won-tae. The siblings are fighting for control of the group and its main company, Korean Air Lines.
Kim Chi-hoon was one of four internal nominees for the board of Hanjin KAL recommended by the heiress and two big shareholders, the Korea Corporate Governance Improvement Fund and Bando Engineering & Construction, last Thursday.
Combined, the three own 32.06 percent of Hanjin KAL.
In late January, the three formed an alliance to replace Hanjin KAL’s chairman, Cho Hyun-ah’s brother Cho Won-tae, with a professional manager. Hanjin KAL owns 30 percent of the national carrier Korean Air Lines.
“In a letter addressed to the Hanjin KAL CEO on Monday, Kim said he will resign as a director nominee,” Korean Air said in a statement Tuesday.
“I do not agree with the offer proposed by the alliance, and it’s regrettable to see that things are not going according to my intentions, which started out pure,” Kim was quoted as saying in the statement. “As a ‘KAL-man,’ I fully understand the stance of Hanjin Group. Moreover I stand by the current leadership composed of my peers and younger generations.”
Kim joined Korean Air in 1982 and served as its London airport office head before becoming a senior executive in a smaller affiliate, the Korean Airport Service, before retiring.
A day after the alliance proposed four directors including Kim last Thursday, Korean Air’s union released an official statement opposing its plan and questioning the qualifications of the nominees.
“Nominees suggested by the alliance for top leadership are either people that know nothing about the aerospace industry or Cho [Hyun-ah]’s loyal men that won’t be anything more than puppets. Can they truly be called professionals in logistics and aerospace?” the statement said.
Kim did not seem to inform Cho Hyun-ah and her two partners of his letter to Korean Air. It was only Tuesday morning that the alliance heard of Kim’s offer to stand aside.
“At dawn, Kim informed us that he had a serious health issue that would prevent him from taking the job,” the alliance said in an official statement, Tuesday, in an apparent attempt to dismiss rumors that the alliance itself was starting to fracture.
“We will remain undeterred by the event and continue to push efforts to normalize Hanjin Group’s management.”
A little more than a month remains until a shareholder’s vote decides Chairman Cho’s position. His term finishes in late March. Cho Hyun-ah and her alliance, that control 32.06 percent, need 18 percent more of the votes.
The sibling’s mother Lee Myung-hee and younger sister Cho Hyun-min have expressed explicit support for Chairman Cho. Hanjin Group’s three labor unions released a joint statement Monday backing him.
BY SONG KYOUNG-SON [firstname.lastname@example.org]