Hanjin Group Chairman Cho Won-tae. (Photo: Hanjin Group)

Hanjin KAL, the holding company of Hanjin Group, held a board of directors’ meeting on March 4 and approved a plan to reconfirm Hanjin Group Chairman Cho Won-tae as an inside director.

Five people, including former Financial Commissions Commission chairman Kim Suk-dong, were approved as outside directors.

Chairman Cho and his white knight shareholders are preparing for a showdown over the plan with a trio of former Korean Air senior executive vice president Cho Hyun-ah, KCGI and Bando Engineering, which is opposing Chairman Cho’s reelection as an inside director, at a shareholder’s general meeting slated for March 27.

The upcoming showdown, considered a neck-and-neck fight with a difference of just 1 percentage point, appeared to be tilting in favor of Chairman Cho, business analysts said.

Business sources said the management feud might be a lost battle for former Korean Air senior executive vice president Cho’s side, since outside and in-house hostility against her has mounted due to the executive’s bad image, which is related to an in-flight accident, which led to the aircraft turning back.

On Feb. 14, Korean Air Trade Union issued a statement criticizing former Korean Air senior executive vice president Cho, saying she was engrossed in her greed of making the airline insolvent in return for her self-interest. The union said the so-called trio alliance may attempt appoint a puppet to be a scarecrow CEO.

If Hanjin Group Chairman Cho, one year in office after his farther and ex-chairman’s death, overcome the current management crisis, he is expected to lay a solid foundation for making Korean Air sustainable for the next 100 years, experts said.

Chairman Cho’s side has a combined 33.45 percent of the voting right calculation.

The 33.45 percent share includes Chairman Cho’s 6.52 percent stake, his mother and Chungsuk Co. adviser, with a 5.31 percent, his younger sister and Hanjin KAL Executive Vice President Cho Hyun-min, with a 6.47 percent, and Delta Airlines’ 10 percent.

On the other hand, Chairman Cho’s elder sister and former Korean Air senior executive vice president Cho has a 6.49 percent share, KCGI has 17.2 percent and Bando Engineering has 8.2 percent.

The confrontation over the management right of the holding company has prompted Hanjin KAL share prices to shoot up above 80,000 won per share on March 3. Hanjin KAL’s shares rose for the seventh consecutive day and closed at 80,800 won on March 3, up 13,500 won per share or 20.06 percent over the previous day.

On the same day, KCGI bought up an additional 322,000 shares on Feb. 5 and Feb. 26, respectively, raising its stake in Hanjin KAL from 17.14 percent to 17.68 percent. The combined portion of the tripartite alliance became 37.48 percent.

On the other hand, Delta Airlines, a white knight of Chairman Cho side, which bought a 10 percent stake in Hanjin KAL, acquired an additional 1 percent on Feb. 20 and Feb. 21.

Chances are high that the management battle will be long-term, as any loser in the soon-to-be voting contest will not give up. The loser will probably summon an extraordinary shareholder’s meeting or a regular shareholders’ meeting in March 2021.

Hanjin Group Chmn. Stresses ‘Sowing a New Seed for Future of Korean Air on a Good Soil’

In a related development, Chairman Cho criticized the tripartite alliance, saying that “soil, clumsily and hastily made with bits and pieces of ingredients,” is a place where a company is considered to simply a means of earning money.

Chairman Cho lashed out that the trio group, who he said is engrossed in exploiting the company as a means of earning money for themesleves. He said the current management is comparable to “mature soil.”

Hanjin Group Chairman Cho Won-tae called for preparations to be made for the next 100 years, saying “We ourselves would like to sow a new seed for the future of Korean Air.” Cho made the remarks while delivering his commemorative speech in celebration of the 51st anniversary of Korea Air’s founding, which was posted in the airliner’s bullet board on March 2.

First, Cho extended heart-felt gratitude to those who have assisted in making Korean Air for a long period of time - 51 years after its establishment. “I thank for the founder-chairman who laid a corporate foundation, his predecessor-chairman and lots of seniors and old-timers who have contributed together,” he said.

Chairman Cho did not forget to extend thanks to his executives and staffers. “I whole-heartedly appreciate our all executives and staff members who have built what Korean Air is and will build what Korea Air will be together.” Finally, he said, “A difficult progress will be required until any fruit can be bore as we expect.”