Hanjin KAL, the holding company of Hanjin Group that owns the country’s largest airline Korean Air, said Tuesday that it would ask shareholders to make the “wise decision” to vote for a current Chairman Cho Won-tae to retain his top seat.
The vote will take place during the shareholders meeting slated for Friday.
Hanjin KAL said in a statement that as the global aviation industry has been hit hard by the COVID-19 pandemic, Korean Air faces an “unprecedented crisis.”
“Amid such a crisis, if a non-professional management team who are ignorant about the aviation industry takes control of Hanjin Group and Korean Air, the company will go bankrupt in less than six months,” the company said.
“However, the current management of Hanjin Group and Korean Air, with over 30 years of expertise, is comprised of aviation and logistics experts. We have capacity to overcome the current crisis,” it added.
Friday’s meeting is important for Cho Won-tae, as the vote will decide whether he will be reappointed as executive director of Hanjin KAL. His tenure expires March 23. He needs at least 38 percent of all votes based on the 77.18 percent attendance rate at the previous shareholders meeting.
The feud between Cho Won-tae and the anti-chairman coalition formed by Won-tae’s older sister Cho Hyun-ah, a former vice president at Korean Air, has been escalating ahead of the upcoming shareholders meeting, with each side maximizing efforts to woo the rest of the shareholders as their stakes are more or less the same size.
Hyun-ah has joined hands with KCGI and Bando E&C, which have 17.29 percent and 8.2 stakes, respectively, in Hanjin KAL. Altogether, they are believed to have secured the support of a total of 31.98 percent shareholders.
In comparison, Chairman Cho and the rest of the owner family -- his mother Lee Myung-hee and younger sister Cho Hyun-min -- hold a combined 22.45 percent.
Combined with third-largest shareholder Delta Air Lines’ 10 percent stake, affiliated family members and Korean Air executives, Hanjin Group Chairman Cho Won-tae has 37.15 percent of shareholders backing him.
Both Bando and Delta acquired extra stake in recent months, but according to the commercial law, shareholders can only exercise their voting rights in the March meeting based on the shares acquired before Dec. 26.
Meanwhile, a coalition of minority shareholders of Hanjin KAL, who together own a 1.5 percent stake, said Monday that they would vote for the anti-chairman coalition.
They said based on the vote conducted at an online community, some 100 shareholders agreed to write a proxy statement to the three-party coalition.
They reportedly cited the current executive’s management chaos as reason.
The coalition led by Cho Hyun-ah has been demanding Hanjin Group bring in professional CEOs to “normalize the group’s businesses, which were harmed by the current chairman, who did not follow his father’s will to run the business harmoniously between family members.”
By Kim Da-sol (firstname.lastname@example.org