HMM board reshuffle fuels Busan relocation tensions

HMM CEO Choi Won-hyok speaks during a regular general shareholders' meeting at the company's headquarters in Seoul, Thursday. Courtesy of HMM

Tensions are escalating between HMM’s labor union and management after the shipping company succeeded Thursday in reshuffling its board, a move seen as a preliminary step to relocate its headquarters from Seoul to Busan.

At a regular general shareholders’ meeting, HMM secured approval to appoint Ahn Yang-soo, former CEO of KDB Life Insurance, and Park Hee-jin, a professor at Pusan National University, as new outside directors.

With the approval, HMM’s board now consists of two executive directors and three nonexecutive directors, reducing the total number of members from six to five.

One shareholder at the meeting raised concerns about Ahn’s past role as a senior executive at the state-run Korea Development Bank (KDB) and Park’s ties to the southeastern port city.

“KDB, once a creditor of HMM, is now its largest shareholder, so the new board member from the bank will likely act as a rubber stamp,” the shareholder said. “Given Park’s background as a scholar based in that region, it will be hard for her to stay neutral on the relocation issue.”

Speaking at the meeting as a shareholder, the leader of HMM’s unionized employees working on land claimed the new board will try to revise the head office's location stipulated in the articles of association by May, to complete the move before the June 3 local elections.

“If management pushes ahead with the relocation, we will go on strike,” he said.

A day before the meeting, unionized HMM employees working at sea joined their land-based colleagues in protesting the plan, holding a joint press conference in front of Cheong Wa Dae to block the relocation.

HMM CEO Choi Won-hyok, however, told shareholders that the new directors have no connection to the relocation plan.

“Both candidates bring relevant expertise and will help enhance corporate and shareholder value,” he said. “If necessary, we will consider expanding the board.”

New Oceans Minister Hwang Jong-woo told reporters Wednesday that the decision rests with HMM’s management, though the government hopes the firm will move to Busan.

“To facilitate an agreement between labor and management, we are considering offering support for the relocation,” he said.

HMM’s two largest shareholders are KDB and Korea Ocean Business Corp., which is under the oversight of the Ministry of Oceans and Fisheries. The National Pension Service is the third-largest shareholder with a 5.62-percent stake.

President Lee Jae Myung has pushed for relocating the oceans ministry and major shipping companies to Busan, citing the need for preemptive action to secure a competitive edge in developing Arctic routes.