San: "Cho Hyun-min and Lee Myung-hee Will Not Participate in Management of Aviation Affiliates"

[Asia Economy Reporter Kangwook Cho] Cho Hyun-min, Executive Director of Hanjin KAL, and Lee Myung-hee, Advisor of Jeongseok Enterprise, among the Hanjin Group family, have decided not to participate in the management of airline affiliates.

On the 16th, the Korea Development Bank (KDB) announced the "Measures to Enhance Competitiveness in the Air Transport Industry," stating that following the integration of Korean Air and Asiana Airlines, an Ethics Management Committee will be established, and the owners of Hanjin Group affiliates will not participate in airline-related management.

On the same day, KDB decided to sign an investment contract worth a total of 800 billion KRW with Hanjin KAL to promote measures to enhance competitiveness in the air transport industry, centered on the integration of Korean Air and Asiana Airlines.

Hanjin KAL will participate in Korean Air's paid-in capital increase of 2.5 trillion KRW for the acquisition of Asiana Airlines, and Korean Air plans to invest a total of 1.8 trillion KRW, including 1.5 trillion KRW in new shares and 300 billion KRW in perpetual bonds of Asiana Airlines, becoming the largest shareholder of Asiana Airlines while resolving liquidity issues to smoothly promote the integration of the two major national airlines.

Choi Dae-hyun, Vice President of the Corporate Finance Division at KDB, said, "In a situation where uncertainty in the airline industry is increasing due to the prolonged COVID-19 crisis, if the two major airlines are maintained, an additional 4.8 trillion KRW in policy funds will inevitably be injected into both companies by 2021," adding, "A massive capital injection into Asiana Airlines is also expected to cause huge losses to creditors."

In particular, KDB decided to establish an independent Ethics Management Committee with high authority to supervise the ethics management of the executives of Hanjin KAL and major affiliates to prevent ethical management issues among management.

Through this, Hanjin Group plans to fulfill responsible management, and KDB will faithfully perform the role of monitoring sound management.

KDB explained that since Hanjin KAL, the holding company of Hanjin Group, is the contracting party of the transaction and the subject of contractual rights and obligations such as the investment agreement, the integration process can proceed smoothly even if there is a change in management rights in the future.

Vice President Choi said, "The Hanjin Group family, including Cho Hyun-min, Executive Director of Hanjin KAL, and Lee Myung-hee, Advisor of Jeongseok Enterprise, actively cooperated with the ethics management measures and decided not to participate in the management of airline-related affiliates."

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