Resignation Five Days After Moving Candidate Announcement... Was the Three-Party Alliance's 'Sleeping with the Enemy' a Self-Defeating Move?

Union Side "Shareholder Alliance Director Candidate, Cho Hyun-ah's Right Hand... Resistance Struggle"
Strategic Revision by Shareholder Alliance Inevitable Due to Kim Chi-hoon Candidate's Defection

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] Kim Chi-hoon, former executive director of Korea Airport and a candidate for inside director recommended by the shareholder coalition for the normalization of Hanjin Group, resigned after five days. It is interpreted that he was conscious of the rapidly worsening internal opinion. Inside and outside the business community, there are criticisms that the private equity fund (PEF) KCGI and Bando Construction, which chose to 'cohabit with the enemy' former Vice President Cho Hyun-ah to seize control of Hanjin Group, have ultimately made a self-defeating move.

According to Hanjin Group on the 18th, former Executive Director Kim sent a letter to the CEO of Hanjin KAL the previous afternoon, stating, "I do not agree with the shareholder proposal advocated by the shareholder coalition. I support the current management," and expressed his intention to resign. The shareholder coalition is a tripartite alliance of former Korean Air Vice President Cho Hyun-ah, private equity fund KCGI, and Bando Construction.

Former Executive Director Kim expressed regret that "things are proceeding very differently from his pure intentions," emphasizing, "As a Kalman (a term referring to Korean Air employees), I fully understand Hanjin Group's position and rather support the current management composed of colleagues and juniors."

◆Union's Fierce Attack Calling Cho Hyun-ah 'Puppet'... Worsening Internal Opinion = Former Executive Director Kim is classified as a figure connected to former Vice President Cho. During his tenure at Korean Air, he mainly built his career in the hotel business division, and after being promoted to executive director, he moved to Korea Airport to perform ground handling duties. This is similar to former Vice President Cho's 'major field.'

The rapidly worsening internal opinion is pointed out as the cause of former Executive Director Kim's sudden resignation. The Korean Air General Labor Union said to Kim and others, "You are nothing but puppets of former Vice President Cho," and declared, "We will mobilize all means to carry out resistance struggles." The unions of Hanjin Co., Ltd. and Korea Airport also joined the Korean Air union in sharply criticizing, saying, "Former Vice President Cho must abandon greed."

It is reported that harsh criticism also came from the Korean Air former executives (OB) association. An industry insider said, "If the Korean Air former executives association and the unions strongly oppose, it would have been a considerable burden for (former Executive Director Kim) himself," and speculated, "He must have also considered the flow related to the management rights dispute."

◆Embarrassed Shareholder Coalition, Has 'Cohabiting with the Enemy' Become a Self-Defeating Move? = The shareholder coalition appears to be in a state of confusion over former Executive Director Kim's resignation. It is reported that the shareholder coalition originally planned to hold a meeting with director candidates on the day. A shareholder coalition official said, "I understand that former Executive Director Kim conveyed his intention to resign early that morning due to serious health problems making it difficult to perform his duties," adding, "Although one person resigned, we will quietly continue on our path."

Due to former Executive Director Kim's resignation, some adjustments to the shareholder coalition's general meeting strategy are inevitable. With his sudden resignation, the number of recommended inside and outside directors has decreased to seven. Since the shareholder proposal deadline has passed, no further recommendations are possible. This disrupts the strategy to secure as many directors as possible at this general meeting to form a majority faction within the board.

The bigger problem is that the 'professional management system,' the justification of the tripartite alliance, has also been damaged. Former Executive Director Kim had no experience in management or flight operations during his tenure, but except for former T'way Air CEO Ham Cheol-ho, a non-executive director, he was the only candidate among the shareholder coalition's inside directors with airline work experience. If the position of former CEO Ham is also decided, the number of inside director candidates with airline experience will approach zero.

Inside and outside the business community evaluate that the alliance with former Vice President Cho, chosen by KCGI and Bando Construction, has ultimately become a self-defeating move. This is due to strong internal opposition and the resulting disarray in their ranks. An industry insider said, "For KCGI, it might have been an unavoidable choice, but joining hands with former Vice President Cho, the person involved in the 'nut rage' incident, has ultimately undermined their own justification," adding, "It will also affect the choices of institutional investors such as the National Pension Service in the future."

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