Korean Air Heiress Announces Palace Coup Plans
15 February, 2020
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 use a professional manager.
Cho Hyun-ah, who found global notoriety in the 2014 "nut rage" scandal and is loathed by staff, really wants to launch her coup at the upcoming shareholder meeting in late March of the conglomerate's holding company Hanjin KAL, where all three siblings hold an almost equal stake.
She's aligned herself with hedge fund Korea Corporate Governance Improvement and Bando Engineering and Construction to wrest control from her brother. The plan is to displace him with the existing 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 this past 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's the very best candidate." Kim's tenure at POSCO ends the following month.
However 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 the other day the hedge fund pushed for an electric voting system to be adopted at the shareholders' meeting to avoid any tampering. The raiders also want to establish a governance-monitoring committee within the conglomerate, which is usually shorthand for maximizing shareholder dividends and may sway small investors.
Cho Won-tae was sent the proposal and is considering his response, that could include recommending more applicants for the board of Hanjin KAL.
KAL does not have any limits on the amount of board members and the chairman could recommend more who are on his side.
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