Battle over Control of Hanjin Group Likely to Heat up

Bando Construction bought 1,225,880 Hanjin KAL shares, 2.1 percent of the total, on May 26. The company, former Korean Air vice president Cho Hyun-ah and activist private equity fund KCGI called for Hanjin Group chairman Cho Won-tae to step down at the ordinary shareholder meeting of Hanjin KAL in March this year. Disputes over the control of the group are likely to heat up again with the three-member alliance having increased its shareholding.

The alliance’s shareholding rose from 42.75 percent to 44.75 percent and Bando Construction’s shareholding rose to approximately 19 percent as a result of the additional purchase in about two months. On the other hand, the shareholding of the Hanjin Group chairman and his allies stands at 41.15 percent, which include 6.52 percent owned by the chairman. His control of the group may be put at risk if an extraordinary shareholder meeting is convened in autumn at the request of the three-member alliance.

“Even if such a request is made, the board of directors, that is, the chairman’s aides are unlikely to accept the request,” said an industry insider, adding, “In that case, the alliance can file for an injunction, and yet the other shareholders are likely to be opposed to it with Korean Air in emergency management to survive the COVID-19 pandemic.” He went on to say, “Bando’s recent purchase is to reach 51 percent rather than to shake his control this autumn.”
 

At the meeting in March, the alliance was defeated with Bando Construction’s shares with exercisable voting rights limited to 5 percent. During the course, it was exposed that Bando Construction chairman Kwon Hong-sa met with the Hanjin Group chairman and demanded an honorary chairman position in the group, which led to disputes over the truth.

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