February 14, 2020 11:51
Hanjin heiress Cho Hyun-ah on Thursday officially announced plans to overthrow her brother Cho Won-tae as chairman of the conglomerate that owns Korean Air and install a professional manager.
Cho Hyun-ah, who came to global notoriety in the 2014 "nut rage" scandal and is loathed by staff, wants to launch her coup at the upcoming shareholder meeting in late March of the conglomerate's holding company Hanjin KAL, in which all three siblings hold an almost equal stake.
She has aligned herself with hedge fund Korea Corporate Governance Improvement and Bando Engineering and Construction to wrest control from her brother. The plan is to replace him with the current chairman of steelmaker POSCO's board of directors, Kim Shin-bae, who has also been vice chairman of the SK Group.
The dysfunctional siblings came into their stakes last year when their father, Cho Yang-ho, died suddenly just days after he had been ousted in another palace coup as chairman of Korean Air.
One source in the daughter's faction said, "We tried hard to get Kim on board because we believe he is the best candidate." Kim's tenure at POSCO ends next month.
But the raiders need the support of minority shareholders because Cho Won-tae has secured the backing of his mother and other sister, and their combined stakes of 33.45 percent outnumber those of his sister and her gang by a slim 1.47 percentage points.
Already last week the hedge fund pushed for an electronic voting system to be adopted at the shareholders' meeting to prevent any tampering. The raiders also want to establish a governance-monitoring committee within the conglomerate, which is usually shorthand for maximizing shareholder dividends and could sway small investors.
Cho Won-tae was sent the proposal and is considering his response, which could include recommending more candidates for the board of Hanjin KAL.
KAL has no limits on the number of board members and the chairman could recommend more who are on his side.
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