Hanwha completes disposal of its cluster-bomb business
Hanwha Corporation announced Wednesday it has completed the sell-off of its cluster-bomb business, in a move to conform with international standards.
Hanwha previously owned 400,000 shares in Korea Defense Industry (KDI), the cluster-bomb business unit it spun off in November.
According to a company filing on Wednesday, Hanwha sold 310,400 shares worth 7.8 billion won ($7.2 million) to Defense K, a company established by former Hanwha staff at KDI engaged in the cluster-bomb business.
The other 89,600 shares were allocated to Defense K employees as a form of “consolation,” as Hanwha put it, for around 220 people who were moved from the corporation to the new unit.
Cluster bombs, also known as scatter bombs, are explosive, air-dropped weapons. Due to their wide dispersion and danger to civilians, there’s been a worldwide movement to eradicate their use. Korea has not been a part of that trend as it is still technically at war with North Korea.
For Hanwha, a manufacturer of defense weapons and industrial equipment, the deal completely cuts its ties to cluster bombs, which from the company’s perspective was a potential obstacle to expanding business overseas and in securing investment.
In recent years, institutional investors, particularly in the United States and Europe, have publicly taken into account corporate responsibility when it comes to making investment decisions. In its statement, the company explained the sell-off was intended to meet the environmental, social and governance (ESG) standards required by international society.
“Hanwha Corporation no longer has any shareholder relations with KDI and plans to never engage in the cluster-bomb business from this point,” the company said in a Wednesday statement.
“The completion of the sell-off allows us to conform with international ethical standards. We hope that would open doors to securing more growth opportunities in the global market and build trust as a company that fulfills social responsibility.”
According to a company spokesman, the cluster-bomb business was about 2 percent of company sales.
BY SONG KYOUNG-SON [email@example.com]