Korean Air Heiress Goes to War with Brother

Sibling rivalry in the Korean Air owner family has escalated into war, with disgraced heiress Cho Hyun-ah taking on her brother and Hanjin Group chairman Cho Won-tae.

Cho Hyun-ah, whose temper tantrums made the airline a global laughing stock in the "nut rage" incident in 2014, has aligned herself with hedge fund Korea Corporate Governance Improvement and Bando Engineering and Construction to wrest control from her equally disgraced younger brother.

"The grave crisis cannot be improved under the current management," the attackers said in a statement. "We will demand the appointment of a professional manager."

The alliance seeks to drive the chairman out at the upcoming shareholders meeting of the conglomerate's holding company Hanjin KAL, in which all three siblings hold an almost equal stake.

Cho Hyun-ah, KCGI and Bando said in a public notice last week that they signed a co-ownership agreement for Hanjin KAL shares. The heiress holds a 6.49 percent stake, while KCGI owns 17.29 percent and Bando 8.2 percent.

Their combined stake easily outstrips the 10.67 percent Cho Won-tae controls with his own 6.52 percent and his allies' 4.15 percent. An intense battle is expected at the shareholders' meeting in March. Their mother Lee Myung-hee holds a 5.31 percent stake, their sister Cho Hyun-min a 6.47 percent stake, Delta Air Lines 10 percent and the National Pension Service 4.11 percent.

When their father Cho Yang-ho died in April last year just days after being ousted as Korean Air chief in a palace coup, management control of the Hanjin Group was uncertain.

Cho Won-tae took the helm, but conflict in the dysfunctional family erupted almost immediately over Cho Hyun-ah's return to an executive job at the conglomerate.

 

After a brief stint in sackcloth and ashes after her conviction over the nut rage scandal, Cho Hyun-ah had returned to Hanjin management in March 2018 as head of KAL Hotel Network, the hotel affiliate, only to be fired again a month later along with Cho Hyun-min, who was accused of assaulting a staffer.

All three women have been convicted or face charges ranging from assault to running a smuggling racket, while Cho Won-tae has been stripped of his university degrees over a cheating scandal.

In December last year, Cho Hyun-ah claimed her brother has been acting against the will of their father, who "wanted the family to run the business together."

Cho Won-tae faces a grueling battle to retain control, and there is no guarantee that his mother and younger sister will side with him. On Christmas Day, a day after Cho Hyun-ah issued the statement, Cho Won-tae visited his mother's house and apparently had a fit in the time-honored family tradition, smashing a vase and other objects, leaked photos indicate.

One industry insider said Lee Myung-hee "is demanding that the siblings apologize to each other, but things don't seem to be going smoothly."