Presidents of HMM, DSME Offer to Resign
Hyundai Merchant Marine (HMM) president Yoo Chang-keun and Daewoo Shipbuilding & Marine Engineering (DSME) president Chung Sung-rip expressed their intention to resign more than two years ahead of their tenure. At present, Korea Development Bank (KDB) is the largest shareholder in each of the companies. It is said that both presidents yielded to the pressure from KDB Governor Lee Dong-geol.
The HMM president announced on Feb. 24 that he would step down ahead of the company’s shareholder meeting scheduled for next month. The DSME president did so about a week ago. As of Sept. 30, 2018, KDB owned 55.7 percent of DSME and 13.13 percent of HMM.
Shareholders in the two companies guaranteed both presidents’ tenure until 2021 during their meetings last year. However, the KDB governor began to put pressure after the meetings by sending a former KDB executive to HMM and publicly criticizing its president for lax management. As for the president of DSME, it is said that he complained, by expressing his will to resign, about the fact that his company was ruled out during KDB’s talks with Hyundai Heavy Industries about a big deal in the shipbuilding industry.
KDB has poured public funds into both HMM and DSME, which means they cannot be free from KDB’s pressure. Besides, they are likely to have a lot of difficulties in finding new CEOs. HMM has a very small pool of candidates limited to Hanjin Shipping and itself. When it comes to DSME, a Hyundai Heavy Industries executive is likely to be appointed as its president after its shares are handed over to Hyundai Heavy Industries and the new president is likely to serve as a temporary president until the completion of Hyundai Heavy Industries’ acquisition of DSME.