A management succession process has been underway at Hanjin Group following the sudden death of the late chairman Cho Yang-ho. Yet signs of a sibling conflict among Cho’s three children over the group’s control have surfaced.
The Fair Trade Commission (FTC) said on May 8 that it will postpone its announcement of the list of large business groups’ chairmen from the originally scheduled May 9 to May 15.
The delay was caused by Hanjin Group’s failure to submit related documents for review by the FTC.
"Hanjin has yet to submit an application for a change of the group’s chairman," the FTC said. "Hanjin Group told us that it has not been able to apply for a change of the group chairman because there is no internal consensus on who will be the next helmsman."
Industry analysts earlier viewed Cho Won-tae, the late chairman’s son who was recently appointed as chairman of Hanjin Kal, the group’s holding company, as highly likely to become the group’s new leader.
Group officials have also said so far that the younger Cho will become the group's new head.
However, with the disclosure of internal differences over the new head, observers say that the late chairman’s two daughters, Cho Hyun-ah and Hyun-min, may have rebelled against their brother.
Until now, Hanjin's failure to submit the required documents has been attributed to its inability to clean up the mess following the funeral of the late chairman.
However, the FTC's explanation suggests that the delay has been caused not by the funeral, but the inability of the three siblings to reach a consensus on the succession of the management rights and power sharing.
Asked if a management dispute has broken out, an official at Hanjin Group said, "We know nothing. All we can say now is that we have not yet submitted the required documents to the FTC."
The late chairman’s family members hold the largest stake, 28.8 percent in total, in Hanjin Kal, the group’s holding company. Yet Cho Won-tae’s share is a mere 2.34 percent, not much different from Cho Hyun-ah’s 2.31 percent and Cho Hyun-min’s 2.30 percent.
The late chairman’s son has to inherit the 17.84 percent (excluding 2.40 percent of preferred shares) stake held by his father to ensure stable management control.
Observers say that the junior Cho will have difficulty inheriting the father’s shareholdings due to the huge inheritance tax burden.
The Fair Trade Commission has the authority to designate the chairman of a business group when it fails to appoint one on its own.
For now, the FTC plans to encourage Hanjin Group to appoint a new chairman by the designated date.