Korea Corporate Governance Improvement (KCGI) CEO Kang Sung-boo speaks during a press conference in Seoul in February. The three-way partnership, including the activist fund, has urged Hanjin Group Chairman Cho Won-tae to step down. Courtesy of UPI News Korea

Shareholders’ meeting slated for March 27

The three-way coalition headed by Hanjin Group heiress Cho Hyun-ah presses Delta Air Lines not to side with the current Hanjin management led by Chairman Cho Won-tae during the upcoming shareholders’ meeting.

In a press release on Tuesday, the coalition urged Delta to “make a wise decision for the future of Hanjin.” The U.S. airline owns an 11-percent stake in Hanjin Kal, the holding company of Hanjin Group.

Hanjin Kal’s shareholders will convene on March 27 when a proxy war is expected to take place between the two siblings. The two sides’ shares are almost identical at just below 40 percent, with Delta widely believed to support Chairman Cho Won-tae.

In case Delta does not vote for the chairman, he is likely to lose at the proxy battle. Hence, the three-way coalition, which is also comprising an activist fund and a construction firm, has tried to persuade Delta.

Delta said last September that its acquisition of Hanjin Kal shares is not aimed at affecting the company’s management. We trust the announcement,” the coalition said in a statement.

We believe that Delta would form a true partnership with Hanjin Kal chief executives recommended by us.”

Taking issue with the rising debt of Korean Air, the flagship unit of Hanjin, the coalition has asked for a Hanjin Kal board reshuffle, and the ouster of Chairman Cho Won-tae.

Instead, they recommended a management team composed of former SK Telecom CEO Kim Shin-bae. The company is the country’s top mobile operator.

When contacted, Delta said that it is “not able to comment at this point.”

The 45-year-old heiress-headed alliance is composed of the Korea Corporate Governance Improvement (KCGI) and Bando Engineering & Construction, a mid-tier builder.

Their combined stake is 37.08 percent compared to 39.25 percent of Chairman Cho’s side, including Delta, whoch increased its stake by 1 percentage point to 11 percent last month, according to a regulatory filing.