March 29, 2019 11:53
Kumho Asiana chairman Park Sam-koo fell on his sword on Thursday over the conglomerate's deteriorating finances and accounting irregularities.
The abrupt announcement came a day before the conglomerate holds its annual shareholders' meeting and just a day after rival Korean Air's shareholders ousted chairman Cho Yang-ho. Kumho Asiana is still Korea's 25th-largest conglomerate with assets totaling W12 trillion and 26 subsidiaries (US$1=W1,138).
The immediate trigger for Park's resignation was the discovery of accounting regularities in a recent audit. "I am taking responsibility for controversy over audit results and decided to step down from my position," Park told reporters.
State-run Korea Development Bank, Kumho's major creditor, in a statement the same day said the conglomerate will submit a new plan to get back on its feet.
In the audit, Asiana was caught failing to submit certain financial information to cover up its money troubles. The Korea Exchange placed the company on monitoring status and suspended trading of its shares on March 22 and 25. It resumed on Tuesday, but the revelations sent the share price plunging more than 10 percent.
Investors were concerned that Asiana would face creditor demands to redeem massive amounts of debt after its credit rating was slashed. A financial regulator said, "KDB sent a message to investors that Kumho Asiana will come up with new plans to improve its finances and Asiana Airlines is making steady profits, so there should be no problems."
Asiana will be audited by KDB for now, while Kumho will search for a new chief soon.
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