Hanjin Chairman Quarrels with His Mother
A sibling rivalry within the owner family of Hanjin Group over the control of the conglomerate has expanded into a mother-son confrontation.
The group’s owner family got together for a meeting on Dec. 25 at the residence of Lee Myung-hee, advisor to Jungseok Corp. and the wife of the group’s late chairman Cho Yang-ho.
The meeting was also attended by Cho Won-tae, chairman of Hanjin Group, and Cho Hyun-min, an executive director of Hanjin Group and the chairman's younger sister. Cho Hyun-ah, a former vice president of Korean Air and the chairman's elder sister, did not attend it.
Chairman Cho Won-tae reportedly had a quarrel with his mother for siding with his elder sister, who recently declared war against him for the group’s control, accusing him of disobeying their father’s dying wishes that the surviving family members co-manage the group. The chairman reportedly broke things and made a fuss at Lee’s residence.
Group officials say that Lee tried to arbitrate the dispute between her son and daughter but failed.
Lee appears to support her daughter in light of the fact that the fracas occurred as her son protested against her arbitration efforts. If Lee and her daughter band together, the two’s combined stake in Hanjin Kal, the group’s holding company, will rise to 11.8 percent, which can be a huge blow to Cho Won-tae, whose stake is a mere 6.52 percent. Cho Won-tae needs to be re-elected at the general shareholders' meeting in March next year, but he would be at a disadvantage if his mother backs his elder sister.
Cho Won-tae, who lost much-needed support from his mother, may make an unprecedented choice to secure firm control of Hanjin Group at the general shareholders' meeting in 2020. Bando E&C, which has secured a 6.28 percent stake in Hanjin Kal, is known to support the chairman, and another sister of his, Cho Hyun-min has not yet clarified her position. Delta Air Lines (10 percent) is known to be friendly to him but has never revealed whom it supports.
Accordingly, some experts are raising the possibility of the chairman joining hands with KCGI that has boosted its stake to 17.29 percent to participate in Hanjin Kal management. “If chairman Cho offers KCGI to share his managerial control, there will be no reason KCGI will reject it,” said an official of the financial investment industry. "If so, chairman Cho will have to turn against his family."