[Courtesy of Hanjin Group]
SEOUL -- The patriarch of South Korea's troubled Hanjin group offered to reduce his group-wide influence by throwing away executive posts at all but three key units as civic group activists joined hands with unionized Korean Air employees to push for management change at a meeting of shareholders this month.
Hanjin said in a statement on Tuesday that group chairman Cho Yang-ho would abandon executive posts at six units to concentrate his energy on Hanjin KAL, the group's holding company, Korean Air and Hanjin Corp., a logistics unit.
The gesture coincided with Korean Air's decision to table the extension of Cho's leadership at a meeting of shareholders on March 27. The country's top flag carrier emphasized the importance of Cho's stewardship as an aviation expert in maximizing the value of shareholders.
On Tuesday, civic group activists and liberal lawyers joined forces with Korean Air's unionized pilots and employees to expel Cho from group management.
In February, Hanjin came up with a roadmap for transparent management in response to consistent pressure from shareholders to solve its ownership crisis through an active campaign to enhance corporate governance and jettison non-core assets.
For transparency, the group promised to increase the number of outside directors, increased dividends and turn money into air transportation and logistics as well as its hotel and leisure business by selling non-core assets including land in central Seoul and a hotel on the southern resort island of Jeju.
KCGI, the country's first activist private equity fund, has urged the group to improve its image and regain social credibility. Among other things, the fund called for the creation of a special committee composed of outside directors and experts to supervise important business issues.
As a key shareholder of Hanjin KAL and Hanjin Corp., the fund wants Korean Air to spin off and list its aerospace research and manufacturing division for long-term growth as a competitive entity.
Hanjin has been 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. No one has been arrested.
reporter
Lim Chang-won
cwlim34@ajunews.com
