[Person人] 40-Year Dedicated Construction Man, Ambition to Enter the Aviation Industry

Kwon Hong-sa, Chairman of Bando Construction
From Mediator to Party in Korean Air Siblings' Dispute

Started Housing Business in Busan in 1980
Built Sports Ties with Hanjin Family
Now Holds 14.95% Stake in Succession Battle

Recently Reported to Demand Honorary Chairman Title
Expected to Face Test at Shareholders' Meeting on 27th

Kwon Hong-sa, Chairman of Bando Construction

[Asia Economy Reporter Donghyun Choi] The owner of a mid-sized construction company who has walked the path of construction for 40 years has become the center of a management rights dispute involving the national airline Korean Air. This is about Kwon Hong-sa, chairman of Bando Construction (age 76). Amid a fierce family feud over the management rights of Hanjin Group, which owns Korea's No.1 airline Korean Air, he is aggressively increasing his shares in Hanjin KAL, the group's holding company, shaking up the situation. Until last year, he appeared to have no interest in the management rights dispute, but he has suddenly changed his stance and rapidly emerged as a threat to the management rights.

Chairman Kwon, born in Busan, graduated from Dong-A University with a degree in Architecture in 1972. After graduation, he joined Cheil Construction but decided that a salaried life was not suitable for him and started his own business in 1975. In 1980, he established Taerim Housing, the predecessor of Bando Construction, and began housing projects in the Busan and Gyeongnam regions. He then rapidly expanded his business by changing the company name to Bando General Construction in 1989 and Bando Construction in 2001. As of last year, Bando Construction ranked 13th in the construction capability evaluation.

The connection between Chairman Kwon and Hanjin Group dates back to the period when Bando Group was growing in earnest. The business community speculates that sports served as the medium. Enjoying sports such as horseback riding and golf, Kwon built a friendship with the late Cho Yang-ho, former chairman of Hanjin Group, through various sports activities including serving as president of the Seoul Equestrian Association since 1998, director of the Korean Sports Council, and vice president of the Ssireum Association. This was during the time when Cho served as president of the Korea Table Tennis Association and vice president of the Korean Sports Council. In 2011, Bando Construction participated in the construction of the third section of the rear complex of the Busan New Port North Container Terminal, a project won by Hanjin Group. However, some argue that despite these connections, the personal friendship between Chairman Kwon and the late Chairman Cho was not very deep, as there are almost no eyewitness accounts of private exchanges between the two.

The relationship between Chairman Kwon and the Hanjin family began to change after the death of the late Chairman Cho last year. By mobilizing affiliates to purchase a large amount of shares in Hanjin KAL, the holding company at the top of Hanjin Group's governance structure, speculation has intensified both inside and outside the business community that he is aiming for the management rights of Korean Air.

On October 8 last year, Chairman Kwon announced that he acquired more than 5% of Hanjin KAL shares through Daehok Development, an affiliate of Bando Construction. Since then, he has accumulated shares in Hanjin KAL through dozens of on-market purchases. As of the previous day, Bando Construction, through group affiliates Daehok Development, Hanyoung Development, and Bando Development, holds 14.95% (8,846,033 shares) of Hanjin KAL. Based on the previous day's closing price, this amounts to about 462.7 billion KRW. Bando Construction is currently forming a so-called 'three-party alliance' with former Korean Air Executive Vice President Cho Hyun-ah and private equity fund KCGI (Kang Sung-bu Fund) to confront the Cho faction head-on.

What is Chairman Kwon's intention? According to the Cho faction, Kwon met with major shareholders of Hanjin Group twice in August and December last year, requesting to be appointed honorary chairman of Hanjin Group and demanding domestic and overseas major real estate development rights owned by Hanjin Group. His demand for the honorary chairman position has become an issue due to false disclosure concerns. Bando Construction refutes this, stating that the meetings were arranged at Chairman Cho's suggestion and that Kwon never demanded management participation.

Even amid the full-scale management rights dispute, Chairman Kwon has not appeared directly at the forefront. This seems to be due to his extreme aversion to media contact. Within the organization, except for close aides, almost no one knows Chairman Kwon's whereabouts properly. His involvement in the Korean Air management rights dispute is considered surprising. In fact, Chairman Kwon has been conservative in management, showing no interest outside construction except for venturing into golf course business while leading the housing construction industry for 40 years.

The industry speculates that, amid government housing market regulations making it difficult to lead a company solely through construction, Chairman Kwon took an interest in the weakened Korean Air management rights after the death of Chairman Cho, which loosened the governance link. It is also widely believed in the industry that this was with an eye on succession of management rights to his eldest son, Kwon Jae-hyun, deputy general manager of Bando Construction.

The first evaluation of Chairman Kwon is expected to take place at the Hanjin KAL shareholders' meeting scheduled for the 27th. Attention is focused on whether Chairman Kwon, who has only cared about land for 40 years, can embrace Korea's No.1 airline company or remain as the one who muddied the waters by jumping into a long-time friend's family feud.

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