Hanjin siblings to share roles in management

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Hanjin siblings to share roles in management

From left are the late Hanjin Group Chairman Cho Yang-ho's eldest daughter Cho Hyun-ah, son and new Hanjin Group Chairman Cho Won-tae and second daughter Cho Hyun-min. Yonhap

By Nam Hyun-woo

The three children of the late Hanjin Group Chairman Cho Yang-ho appear to have reached a consensus on how to split their roles in running the logistics-centered conglomerate, according to industry analysts, Tuesday.

They said the siblings ― Hanjin Group Chairman Won-tae, former Korean Air Executive Vice President Hyun-ah and former Jin Air Vice President Hyun-min ― will likely join forces in operating the group as their management is being threatened by the activist fund KCGI, which holds a nearly 16 percent stake in the group's holding firm Hanjin KAL. Won-tae is expected to manage Korean Air, while Hyun-ah and Hyun-min will each lead Hanjin's hotel and resort units, and Jin Air.

Hyun-min's return to management of Hanjin KAL Monday signals that the three have ironed out their differences and agreed to work together, the analysts said. She was made a senior vice president of Hanjin KAL, and executive vice president of Jeongseok Enterprise.

Her comeback came 14 months after she resigned from her group positions, including senior vice president of Korean Air and executive vice president of Jin Air, amid public uproar over her misbehavior. She stood trial for allegedly throwing a cup of water during a business meeting with a partner company last year, but was acquitted.

Her return is interpreted as a sign that the siblings have reached common ground in splitting up their father's legacy, including a controlling stake in the holding firm and management rights over Hanjin Group. The elder Cho died of a chronic lung disease in April.

Their feud surfaced in May when Hanjin Group belatedly designated Won-tae as its leader recognized by the Fair Trade Act. Hyun-min and Hyun-ah allegedly disagreed with their older brother becoming the leader of the group.

"Since Hyun-min has returned to the group's management, the siblings seem to have addressed their disagreement over the group's management succession," said an industry official who has knowledge of the group.

"It will be too early to say the group will be controlled jointly by the siblings, but it seems to be clear they will join forces in serving their respective roles in the group, rather than standing against each other."

On her way to the office Tuesday morning, Hyun-min briefly said "Yes" to reporters asking whether the family had reached an agreement on the management succession.

Industry analysts said the siblings would return to their former positions from when their father was alive, but that will happen after issues regarding their previous misdeeds are addressed.

Hyun-min returned to Hanjin KAL, not Jin Air which she used to lead, to fight growing pressure from a local activist fund that is increasing its stake in the holding firm and demanding the group improve its corporate governance.

Currently, Jin Air is under the aviation authority's ban on new routes, new planes and the operation of non-scheduled flights, because Hyun-min, a U.S. citizen, served on the company's board of directors for six years from 2010 to 2016, which is a violation of the Transport Law.

Since Jin Air is suffering from the fallout of the ban, Hyun-min's return could draw severe opposition from its union. But KCGI's pressure on Hanjin KAL has brought up the necessity of her presence in the group, the official said.

KGCI recently increased its stake in Hanjin KAL to 15.98 percent, while brokerages expect the amount will grow to 20 percent in the near future, against the late Cho's stake of 17.84 percent.

Hyun-ah is currently on trial for smuggling luxury goods, and her potential return will likely be decided after the trial, the official said.
From left are the late Hanjin Group Chairman Cho Yang-ho's eldest daughter Cho Hyun-ah, son and new Hanjin Group Chairman Cho Won-tae and second daughter Cho Hyun-min. Yonhap

By Nam Hyun-woo

The three children of the late Hanjin Group Chairman Cho Yang-ho appear to have reached a consensus on how to split their roles in running the logistics-centered conglomerate, according to industry analysts, Tuesday.

They said the siblings ― Hanjin Group Chairman Won-tae, former Korean Air Executive Vice President Hyun-ah and former Jin Air Vice President Hyun-min ― will likely join forces in operating the group as their management is being threatened by the activist fund KCGI, which holds a nearly 16 percent stake in the group's holding firm Hanjin KAL. Won-tae is expected to manage Korean Air, while Hyun-ah and Hyun-min will each lead Hanjin's hotel and resort units, and Jin Air.

Hyun-min's return to management of Hanjin KAL Monday signals that the three have ironed out their differences and agreed to work together, the analysts said. She was made a senior vice president of Hanjin KAL, and executive vice president of Jeongseok Enterprise.

Her comeback came 14 months after she resigned from her group positions, including senior vice president of Korean Air and executive vice president of Jin Air, amid public uproar over her misbehavior. She stood trial for allegedly throwing a cup of water during a business meeting with a partner company last year, but was acquitted.

Her return is interpreted as a sign that the siblings have reached common ground in splitting up their father's legacy, including a controlling stake in the holding firm and management rights over Hanjin Group. The elder Cho died of a chronic lung disease in April.

Their feud surfaced in May when Hanjin Group belatedly designated Won-tae as its leader recognized by the Fair Trade Act. Hyun-min and Hyun-ah allegedly disagreed with their older brother becoming the leader of the group.

"Since Hyun-min has returned to the group's management, the siblings seem to have addressed their disagreement over the group's management succession," said an industry official who has knowledge of the group.

"It will be too early to say the group will be controlled jointly by the siblings, but it seems to be clear they will join forces in serving their respective roles in the group, rather than standing against each other."

On her way to the office Tuesday morning, Hyun-min briefly said "Yes" to reporters asking whether the family had reached an agreement on the management succession.

Industry analysts said the siblings would return to their former positions from when their father was alive, but that will happen after issues regarding their previous misdeeds are addressed.

Hyun-min returned to Hanjin KAL, not Jin Air which she used to lead, to fight growing pressure from a local activist fund that is increasing its stake in the holding firm and demanding the group improve its corporate governance.

Currently, Jin Air is under the aviation authority's ban on new routes, new planes and the operation of non-scheduled flights, because Hyun-min, a U.S. citizen, served on the company's board of directors for six years from 2010 to 2016, which is a violation of the Transport Law.

Since Jin Air is suffering from the fallout of the ban, Hyun-min's return could draw severe opposition from its union. But KCGI's pressure on Hanjin KAL has brought up the necessity of her presence in the group, the official said.

KGCI recently increased its stake in Hanjin KAL to 15.98 percent, while brokerages expect the amount will grow to 20 percent in the near future, against the late Cho's stake of 17.84 percent.

Hyun-ah is currently on trial for smuggling luxury goods, and her potential return will likely be decided after the trial, the official said.
Nam Hyun-woo namhw@koreatimes.co.kr


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