Stocks of Hanwha Group Units Take Beating
By Yoon Ja-young
Staff Reporter
Hanwha Corp. and other Hanwha Group shares are expected to reel for time being on concerns about the fallout of the group chairman's alleged involvement in violence against bar tenders in apparent revenge for an attack on his son, analysts said.
Hanwha Chairman Kim Seung-youn faces arrest for his involvement in the assault on the bar employees, according to police. Kim is suspected of ordering his bodyguards on March 8 to beat up the workers who allegedly got involved in a fistfight with his 22-year-old second son.
With the case unlikely to be resolved anytime soon, Hanwha Group is expected to suffer a setback not only to its image but also its businesses as a whole.
Stock investors are already moving to trim their holdings of Hanwha units on concerns that the scandal could negatively affect the group's operations.
``This case will negatively affect sentiment in Hanwha Group stocks at least for a while,'' Meritz Securities said in a research note. ``But the case will not affect fundamentals of group units and the negative impact is unlikely to last long.''
Before the case, Kim was actively involved in the operations of Hanwha units, according to Hanwha officials.
In March, Kim took the presidential posts of Hanwha Chemical, Hanwha Galleria, Hanwha Engineering & Construction, Hanwha TechM, and Dream Pharma.
``Hanwha Group shares are likely to remain sluggish in the near term on concerns that the group will see management vacuum,'' a local brokerage analyst said.
The company introduced a new corporate image in January and launched bold steps to expand its overseas operations. This strategy to increase its presence in global markets will likely be affected by the embarrassing case, analysts said.
Shares of Hanwha Corp., the de-facto holding firm of the group, fell 8 percent in three days to April 27 before posting a 3 percent gain on April 30.
Hanwha Chemical's shares fell nearly 4 percent during three sessions until April 27, while Hanwha Securities dropped 8 percent.