Hanjin chairman wins vote showdown with sister

Hanjin KAL CEO Seok Tae-soo presides over the general shareholder meeting at the headquarters of the company in Seoul, Friday. Courtesy of Hanjin Group

By Jun Ji-hye

Hanjin Group Chairman Cho Won-tae was reappointed as an executive director of Hanjin KAL, the group's holding company, Friday, defending his management rights of the logistics-centered business group amid a sibling feud with his elder sister and group heiress Cho Hyun-ah.

During the holding firm's shareholders meeting, the incumbent chairman defended his board seat by garnering 56.67 percent approval.

Hanjin Group Chairman Cho Won-tae.

Cho Won-tae has been in fight for control of the group with a three-party anti-chairman alliance led by his sister.

Hyun-ah, a former vice president at Korean Air who is backed by local activist fund Korea Corporate Governance Improvement (KCGI) and mid-sized builder Bando Engineering & Construction, has called for the need to replace the leadership to improve the group's financial status and shareholder value.

A day ahead of the shareholders meeting, the National Pension Service (NPS) announced its decision to vote for the reappointment of the group's incumbent chairman as an executive director.

The state pension fund, which holds a 2.9 percent stake in Hanjin KAL, was considered to hold a casting vote in determining the chairman's fate.

The Seoul Central District Court's ruling against the anti-chairman alliance, issued Tuesday, also weighed in favor of the chairman because it reduced the alliance's shares eligible for voting rights.

The court said the construction firm could cast only 5 percent of the votes, ruling against the firm's request for an injunction that asked for it to be allowed to cast 8.2 percent of its votes.

Industry officials expect the sibling feud over the control of the group to continue even after the shareholders meeting because the anti-chairman alliance appears to have prepared for a long battle by buying additional shares.

The construction company and KCGI announced Tuesday that they had bought additional 1.95 percent and 0.06 percent shares, respectively, increasing the alliance's combined stakes to 42.13 percent.

Industry officials raised the likelihood that the alliance would ask for an extraordinary meeting of shareholders to hold the chairman in check, or file a nullity suit against him.