Hanjin heiress caught off guard by resignation of her director nominee

(From left) Hanjin Group heiress Cho Hyun-ah, KCGI CEO Kang Sung-boo and Bando Engineering & Construction Co. Chairman Kwon Hong-sa.

A coalition led by Hanjin Group heiress Cho Hyun-ah to challenge single leadership by her brother and current chair of Hanjin KAL Cho Won-tae has hit a snag after a candidate to serve as her ally on the board jumped ship to join the opposing front ahead of the proxy battle in the shareholders’ meeting next month.

Hanjin KAL, the holding entity of Hanjin Group managing flag carrier Korean Air Lines Co., said Tuesday that Kim Chi-hoon, one of the three nominees recommended by the alliance, sent a letter to the company to withdraw himself from the candidacy.

“I do not agree with the shareholder proposals offered by the alliance and feel sorry that things are going against my pure intentions,” Kim was quoted as saying in the letter, according to Hanjin KAL.

Kim went on to express support for “KAL men”, referring to current management and staff.

His withdrawal comes after the union and retired executives of Korean Air publicly declared opposition to the meddling by the alliance of Cho Hyun-ah, former Korean Air vice president who disgraced herself and the company for her “nut rage” scandal in 2014 when she threw a tantrum over the way her nuts were served and ordered the plane to return to the gate.

The labor union released a statement last Friday and said the plan proposed by Cho Hyun-ah and her supporters is entirely based on their self-interest. The unionized workers of Hanjin Group also announced a joint statement on Monday to urge Hyun-ah to back off for the good of all Hanjin workers.

Kim Chi-hoon

Hyun-ah, the eldest daughter of late Hanjin Group Chairman Cho Yang-ho, formed an alliance with Hanjin KAL’s second largest shareholder and domestic activist fund Korea Corporate Governance Improvement (KCGI) and fourth largest shareholder Bando Engineering & Construction to oust her brother Cho Won-tae who took over the helm of the country’s transportation conglomerate following the sudden death of his father in April 2019. They hold a combined 32.06 percent stake in Hanjin KAL.

Kim’s unexpected resignation could upset their campaign as Kim, former vice president of Korean Air Lines, was expected to speak on behalf of Cho Hyun-ah on the managing board.

“Kim told us in the early morning that he couldn’t take the job due to his serious health issues,” the alliance said in a statement on Tuesday. “It’s really regrettable to see his resignation.”

The alliance last Friday proposed to nominate three internal directors and four outside directors to secure two-thirds of the board by raising the number of seats to 12. They also specified shareholder proposals including inviting a professional manager and introducing electronic voting system, which they argue are aimed at enhancing shareholder rights.

Hanjin KAL is expected to hold its shareholder meeting in late March. Their mother Lee Myung-hee and younger sister Cho Hyun-min, a Hanjin Kal executive, declared their vote of confidence for Cho Won-tae.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]