À̹ÌÁö È®´ë Hanjin Group chairman Cho Won-tae
The battle over the control of Hanjin KAL Corp., the parent company of Korean Air Lines Co., has entered a new round after a three-way alliance led by Hanjin Group heiress Cho Hyun-ah filed a civil suit to gain validation for their vote rights to disapprove the agenda of March shareholders meeting that reappointed the heir Cho Won-tae as the chairman.
According to multiple sources from the aviation industry on Thursday, the heiress-led union that also includes two major shareholders Bando Engineering & Construction (Bando E&C) and Korean activist fund Korea Corporate Governance Improvement (KCGI) raised a suit on Tuesday demanding cancellation of the re-appointment of Cho Won-tae as Hanjin Group chairman that was approved during a shareholders meeting of Hanjin KAL on March 27.
This is a follow-up move by the three-way alliance after their injunctions to prohibit Korean Air Lines employee union and insurance fund with a combined 3.79 percent shares from exercising their voting rights were dismissed by a court on March 24. The Seoul Central District Court on the same day also rejected the request of Bando E&C subsidiaries to enable to them to act the woting power in 8.28 percent stake in Hanjin KAL.
Industry sources noted that the latest suit has opened a second round of the proxy battle over management control at Hanjin Group.
À̹ÌÁö È®´ë (From left) Hanjin Group heiress Cho Hyun-ah, KCGI CEO Kang Sung-boo and Bando Engineering & Construction Co. Chairman Kwon Hong-sa.
The transportation conglomerate has been engaged in the dispute between current group chairman Cho Won-tae backed by family members and major shareholders, such as Delta Air, Kakao, and employee association, and his older sister Hyun-ah backed by KCGI and Bando E&C.
The sibling feud erupted after the sudden death of their father Cho Yang-ho in April last year.
The conglomerate, meanwhile, has been already struggling to salvage its key carrier unit Korean Air Lines amid travel standstill from COVID-19 pandemic.
State lenders Korea Development Bank (KDB) and Export-Import Bank of Korea demanded the carrier to raise 2 trillion won ($1.6 billion) in new capital through self-rescue efforts by the end of next year in return for 1.2 trillion won in public fund aid.
Korean Air aims to raise 2 trillion won through issuance of new stocks and asset sales. The carrier¡¯s board on May 13 approved to issue 1 trillion won worth in new shares. It has hired a consortium of Samjong KPMG and Samsung Securities as sales manager to sell real estate assets including plots of land worth 1 trillion won.
Shares of Hanjin KAL were trading 1.29 percent higher at 94,500 won Friday morning and Korean Air Lines 2.1 percent lower at 20,950 won.
By Noh Hyun and Lee Eun-joo
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]