Sang-jik Lee Donates All Shares to Eastar... Jeju Air "Investigating"

Eastar Jet union members are watching the press conference of CEO Choi Jong-gu held at the headquarters in Gangseo-gu, Seoul on the 29th. Photo by Moon Honam munonam@

[Asia Economy Reporter Yu Je-hoon] Lee Sang-jik, a member of the Democratic Party of Korea, has decided to donate all the stocks he and his family hold in Eastar Jet. However, Jeju Air, the acquiring party, is taking a wait-and-see stance, stating that it has "no position" on the matter.

At a press conference for Eastar Jet held at the headquarters in Gangseo-gu, Seoul, in the afternoon, Lee announced through a statement read by Kim Yoo-sang, Executive Director of the Management Control Office, that "As the founder, I held a family meeting and decided to donate all the Eastar Jet shares owned by Eastar Holdings to the company."

Choi Jong-gu, CEO of Eastar Jet, expressed "respect" for Lee’s donation of shares and urged Jeju Air to promptly proceed with the merger and acquisition (M&A) process. In a statement, CEO Choi said, "While we bear the primary responsibility for the difficulties Eastar Jet is currently facing, Jeju Air is not free from responsibility either," adding, "If the worst-case scenario materializes, Jeju Air will not be able to avoid accountability."

Following this announcement, the 38.6% stake in Eastar Jet held by Eastar Holdings is expected to be transferred to Eastar Jet through procedural steps. Eastar Holdings is a holding company wholly owned by Lee’s two children.

Regarding the 25 billion KRW in unpaid wages, which had been an obstacle in negotiations, Eastar Jet plans to resolve the issue using the estimated 41 billion KRW from the proceeds of the share sale. CEO Choi stated, "Since Eastar Holdings has donated the shares to the company, (if the M&A is completed) the sale proceeds will be considered as coming into the company," adding, "That will resolve the unpaid wages."

CEO Choi also added that most of the preconditions for acquisition, such as the $31 million payment guarantee for Thai Eastar Jet, have been resolved. He explained, "I do not know the details (because it is a negotiation between Eastar Holdings and Jeju Air), but I understand that two main preconditions have been well resolved."

However, Jeju Air remains silent regarding Lee’s donation of shares and Eastar Jet’s demand for M&A execution. A Jeju Air official said, "We are currently trying to understand the true meaning of the contents mentioned at the press conference," and added, "At this time, we have no separate position."

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