New Hanjin chairman voices readiness to make bold reform in corporate structure

By Lim Chang-won Posted : June 3, 2019, 18:10 Updated : June 3, 2019, 18:10

[Courtesy of Korean Air]

SEOUL -- Fresh from his successful debut in an international conference, Hanjin Group's new chairman Cho Won-tae expressed his willingness to make a bold reform in corporate structure with no drastic change in the guiding philosophy of his late father who used to emphasize "harmony among family members."

Cho, 43, put concerns about his leadership to rest through the seamless hosting of the International Air Transport Association (IATA) that concluded its three-day annual meeting in Seoul on Monday. He was elected as a member of IATA's policy review and decision-making body, Board of Governors (BoG).

The IATA conference followed the sudden death of Hanjin's late chairman, Cho Yang-ho, on April 8 and a string of disgraceful scandals involving the ruling family. In May, South Korea's state anti-trust watchdog designated Chon Won-tae, who serves as Korean Air president.

"There will be no change in direction, but if we have to change with the times, I will do it in a bold manner without changing our basic philosophy through discussion with executives," the new chairman told reporters Monday on the sidelines of the IATA meeting. He said his father used to stress "harmony among family members" before his death.

"Based on that, I have a lot of discussions with my family now. I can't tell you that consultations were complete, but it seems to be going well," Cho Won-tae said, admitting carefully that there was a family dispute over how to run the group.

As the death of his father led to the group's third-generation transfer of leadership in a state of unpreparedness, Cho Won-tae, who joined the group in 2003 and became Korean Air's president in 2017, has a mountain of work to consolidate his group-wide control as Hanjin is under pressure to enhance its corporate governance and transparency in accounting and management.

Like other family-run conglomerates, the Cho family has controlled the group through a complex web of cross-shareholdings. Cho Yang-ho had owned 17.84 percent in the holding company, while his son and two daughters control up to 2.34 percent, respectively.

Hanjin was hit hard by a scandal involving the chairman's youngest daughter, Cho Hyun-min, who allegedly threw a glass cup and sprayed plum juice during a business meeting with advertising agency officials. The scandal fueled public anger, leading to multiple investigations into the chairman, his wife and children on charges of creating a slush fund, evading taxes, bringing in luxury foreign goods illegally, abusing and assaulting company employees and others.
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