Published : Dec. 23, 2019 - 14:45
A family war is brewing in Hanjin Group, one of Korea’s vast conglomerates which also owns flag carrier Korean Air, with siblings battling to assume management control.
Late Chairman Cho Yang-ho’s eldest daughter Cho Hyun-ah is stepping up her attack against her younger brother and present Chairman Cho Won-tae, hinting at continued dispute about succession.
Former Korean Air Vice President Cho Hyun-ah said in a statement Monday via a law firm that “ Cho Won-tae’s business management of Hanjin Group is different from the late chairman’s instructions for harmonious, joint management,” adding that he “continues to delay and insincerely respond to family discussions.”
Former Korean Air Vice President Cho Hyun-ah (Korean Air)
In April, the group’s holding company Hanjin KAL appointed the late chairman’s only son, the 44-year-old Won-tae, to succeed him.
Won-tae is also president and CEO of Korean Air, the group’s main cash cow among other subsidiaries, including budget carrier Jin Air.
Hyun-ah said in the statement that as one of the co-heirs, she wants to continuously grow Hanjin Group based on her father’s will to harmoniously run the business between siblings, and she will consult shareholders to resolve the issue.
“Hanjin Group is heading in a different direction from the late chairman’s will,” she said, claiming the leadership was decided without ample discussion or agreement between the heirs.
“With regard to former Vice President Cho Hyun-ah’s return to the management, it was announced as if she had agreed to what was decided, but there wasn’t any agreement,” the statement read.
Later in the day, Hanjin Group released its own statement, saying that the latest development should not negatively impact the group’s business normalization.
“Management of business should be conducted based on the related act, regulation, shareholders meeting, board meeting and other due procedures,” the group said in a statement.
“Since the late chairman’s passing away, executives and employees at Hanjin Group have been doing their best to meet the shareholders’ and the market’s expectation. We believe this is what the late chairman sincerely wanted us to do,” the group added.
In 2018, Hyun-ha returned to the management as an executive of KAL Hotel Network after serving five months in jail for violating aviation safety, coercion and abuse of power dating to 2014 over the infamous “nut rage” incident. But she was forced to step down by her father a month later, when her younger sister Cho Hyun-min allegedly threw a cup of water at an advertising agency staff, reigniting the power abuse controversy.
In the latest executive reshuffle conducted last month, it was highly anticipated that Hyun-ah would take control of KAL Hotel Network, but she was not on the list.
Rumors have circulated that Hyun-ah and Won-tae are in a dispute over succession plans, including the inheritance of their father’s shares.
The Cho family currently holds a 33.3 percent stake in Korean Air and has a 29 percent stake in Hanjin KAL.
Hanjin Group Chairman Cho Won-tae (Korean Air)
But market insiders viewed that the return of Hyun-ah may not be imminent, as she recently faced trial along with her mother, Lee Myung-hee, on charges including the smuggling of goods and illegally hiring foreign housekeepers from the Philippines.
In June, Hanjin Group reinstated the youngest daughter Hyun-min as senior vice president at Hanjin KAL and an executive vice president of Jungseok Enterpise, a real estate developer under the group.
The return of Hyun-min, who left the company 14 months ago over her involvement in the power abuse scandal, was widely seen as the children of the late chairman making progress in their succession plans, with each taking core businesses.
On Monday, shares of the Kospi-listed Korean Air rose 4.6 percent to close at 29,100 won ($25), while the benchmark Kospi was almost stagnant.
By Kim Da-sol (
ddd@heraldcorp.com)