Cho Won-tae Puts Songhyeon-dong Site and Wangsang Leisure Up for Sale... KCGI Checks: "No Sincerity"

Korean Air Board Meeting on the 6th Morning... Proposes Financial Restructuring Measures Including Sale of Songhyeon-dong Hotel Site
Hanjin KAL Board Meeting on the 7th... Attention on Whether a Surprise Card for Governance Improvement Will Emerge

On the 6th, during the Korean Air board meeting, a sense of silence prevailed at the Korean Air Seosomun building in Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Yoo Je-hoon] Cho Won-tae, chairman of Hanjin Group, has decided to strengthen the independence of Korean Air's board of directors and proceed with the sale of the idle hotel site in Songhyeon-dong, Jongno-gu, in response to the offensive from the 'anti-Cho Won-tae coalition.' KCGI, a private equity fund representing the anti-Cho Won-tae coalition, pressured Chairman Cho by stating, "It is difficult to attribute sincerity or credibility to the belated management improvement plan." As the Hanjin KAL shareholders' meeting scheduled for next month approaches, the public opinion battle between the two sides targeting shareholders is intensifying.

On the morning of the 6th, Korean Air held a board meeting at the KAL Building in Seosomun, Jung-gu, Seoul, to discuss this year's management plan, last year's business performance, and management improvement plans. Although Chairman Cho did not appear in person, it is known that he attended the board meeting via video connection.

At the meeting, Korean Air's board decided to sell idle assets such as the hotel site in Songhyeon-dong, Jongno-gu, and Wangsang Leisure Development. This laid out a concrete blueprint for improving Korean Air's financial structure. The debt ratio of Korean Air, which approached 922% at the end of the third quarter last year, has been a continuous point of concern raised by KCGI and others.

Earlier, as Chairman Cho, former Korean Air Vice President Cho Hyun-ah, KCGI, and Bando Construction began a management rights dispute through a joint shareholding agreement, Korean Air and Hanjin KAL held board meetings over two days starting from this day to discuss management improvement plans and governance improvement measures. On the 7th, another board meeting is scheduled to discuss governance improvements for Hanjin KAL.

Meanwhile, the anti-Cho Won-tae coalition cast doubt on these improvement plans. KCGI, through its statement titled "Position on the Recent (Hanjin KAL Share) Joint Holding Agreement" released on the morning of the same day, pointed out, "Although another temporary measure may be presented ahead of this year's shareholders' meeting, issuing plans without genuine will or effort for improvement and only focused on maintaining status is not a fundamental solution to the problem."

KCGI emphasized, "This joint holding agreement is the first step to transform the existing management system, which operates Hanjin Group as the private property of a specific individual without vision or capability, into a professional management system to achieve governance improvement. It is desirable for professional managers, along with internal and external experts, to put their heads together to lead the company in a favorable direction, and for shareholders to monitor and check the management activities of the directors, which constitutes a desirable corporate governance."

This content was produced with the assistance of AI translation services.