Hanjin Kal CEO Fends Off Coup Attempt From ‘Nut Rage’ Sister
Hanjin Kal Corp. Chief Executive Officer Walter Cho declared victory after shareholders backed an alliance of board candidates he led against a revolt by activist investors and his older sister, who had sought reforms at the family-run aviation industry holding company.
Cho received 56.7% of the vote from shareholders in a meeting Friday. The result leaves the CEO, who was handed leadership of the company last year after his father’s death, in charge of the flagship of a group that spans airlines, logistics and hotels. Heather Cho and the company’s biggest shareholder had sought to replace her younger brother with a “professional manager.”
Shares of Hanjin Kal jumped by the daily 30% limit, the biggest gain since April, to close at 57,200 won in Seoul. The stock has advanced 43% this year, compared with a 22% decline in the benchmark Kospi index.
The 44-year-old CEO won the backing of investors after vowing to sell more non-core assets and attracting a major investment from Delta Air Lines Inc. Those steps, and speculation that the push by activists would boost returns helped the shares surge 64% last month. They have mostly surrendered those gains in March as the coronavirus crisis devastated the earnings outlook at Hanjin Kal’s mainstay business, Korean Air Lines Co.
Walter Cho’s victory may help settle a feud that has split the dynasty, pitting his sister and her allies including top shareholder Korea Corporate Governance Improvement fund against a voting bloc headed by the CEO, his mother and Delta. Sidelining sibling acrimony that repeatedly spilled into the local press in recent months may also help clear the way for Korean Air to respond to the unprecedented crisis posed by the virus outbreak.
All candidates backed by Hanjin’s current management won seats on the board, while the alliance failed to secure any seats.
Shareholder support for the current leadership may also damp any expectations that Heather Cho would return to a leadership position at Korean Air, where she earned global infamy in what became known as the “nut rage” incident in 2014.
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