Hanjin sibling feud

Raising corporate value should be top priority

Hanjin Group Chairman Cho Won-tae has defended his control over management of Hanjin KAL, the group's holding company, in a feud with his elder sister Cho Hyun-ah. During the firm's shareholders meeting Friday, 56.67 percent of shareholders supported the reappointment of the chairman as an executive director.

The shareholders also elected six new directors recommended by Cho Won-tae's side while turning down seven nominees proposed by a three-party alliance involving the heiress, activist fund Korea Corporate Governance Improvement (KCGI) and mid-sized builder Bando Engineering & Construction. As a result, the proxy war ended in a complete victory for the chairman.

Although Cho Won-tae beat his sister this time around, the sibling feud is expected to continue as the alliance has vowed to "do whatever it can to pull Hanjin Group out of the crisis and bring it back to normal." That is why the current management, including Chairman Cho, should reflect on why the country's 13th-largest conglomerate has been in this mess to such an extent as to be mired in a sibling dispute, and turn over a new leaf.

Hanjin Group has been accused of embezzlement, breach of trust, smuggling and aberrations involving owner-family members such as the "nut rage" incident in 2014. Such incidents tarnished the group's image and dented the value of its affiliates. But the board of directors has been merely a rubber stamp, failing to check the family's "imperial management." So it's somewhat regrettable that the anti-chairman alliance failed in its attempt to get even one director elected in the shareholders meeting.

The alliance claims it wants to introduce a professional management system into the logistics-centered conglomerate, but the system doesn't automatically guarantee success. Cho Hyun-ah should refrain from personal attacks and emotional confrontation although she continues to fight over who controls the group. The most important thing for the brother and sister is to raise the corporate value of the group.