Hanjin management feud

Owner family should stop fighting, present visions

A feud inside Hanjin Group's owner family over managerial rights is deepening after the death of former Chairman Cho Yangho in April last year. What makes the situation more complicated is potential conflicts of interest among corporate shareholders of Hanjin KAL, the group's holding company, depending on who will head the group.

On Friday, Cho's eldest daughter Cho Hyunah, a former vice president of the group's flagship Korean Air who is infamous for the "nut rage" incident in 2014, issued a joint statement along with two major Hanjin KAL shareholders ― Korea Corporate Governance Improvement (KCGI), an activist fund, and Bando Engineering & Construction ― to demand the removal of her younger brother Cho Wontae as group chairman. They denounced the brother for putting the group at risk by "ignoring the late chairman's wishes," saying Hanjin needs a professional manager for a new takeoff.

This added a new twist to the Hanjin family feud, which emerged after Cho Hyunah claimed that her brother was making managerial decisions "unilaterally" without consulting the family in advance.

With a crucial shareholders' meeting scheduled for March, the sibling fight for management, and relevant inheritance problems may escalate further. The 44-year-old brother is seeking re-election as a Hanjin Group board member and to stay on as group chairman.

But his bid is now uncertain as KCGI, the biggest shareholder of Hanjin KAL with a 17.29 percent stake, and Bando with 8.28 percent have sided with the heiress, who holds 6.49 percent, to unseat her brother. Cho Wontae holds a 6.52 percent stake, while younger sister Cho Hyunmin and mother Lee Myunghee have 6.47 percent and 5.31 percent, respectively.

Given Hanjin Group has been suffering from financial difficulties, it is disappointing to see the owner family fighting for management without presenting any detailed plans on how to enhance profitability and corporate value.