KCGI warns U.S. airline firm against cooperation with Hanjin chief
A Korean activist fund requires Delta Air Lines to clarify why the latter recently purchased a stake in Hanjin KAL, the holding company of the country’s flag carrier Korean Air.
In a letter to Delta, Korea Corporate Governance Improvement (KCGI) came up with the request as Delta gobbled up a 4.3 percent stake in Hanjin KAL last month.
As the second-largest shareholder of Hanjin KAL, KCGI has tried to improve the governance and management of the Hanjin Group, a family-owned conglomerate headed by Chairman Cho Won-tae.
Hanjin’s owner family members, who own a 28.93 percent stake in Hanjin KAL, have struggled to thwart challenges from the homegrown fund, which holds a 15.08 percent stake.
Against this backdrop, Delta was regarded as a “white knight” for Chairman Cho and his family as the U.S. outfit strives to jack up its share in Hanjin KAL to 10 percent.
Delta and Hanjin have cooperated by running a highly-profitable trans-Pacific joint venture.
However, KCGI did not give up – last month, the fund asked Delta to join hands with it to eliminate inefficiencies and improve management transparency of Hanjin.
This week’s letter also seems to be in line with such efforts.
“We welcome Delta’s investment in Hanjin. In our opinion, we have to collaborate with Delta to make Hanjin sell off unnecessary assets and focus on the airline business,” KCGI said.
“If Delta made any implied agreement with Hanjin family members with regard to the stake investment, we let Delta know that such activities are against the Korean law.”
Then, the Seoul-based fund asked for a meeting with Delta CEO Ed Bastian.