Korea Corporate Governance Improvement chief Kang Sung-bu speaks during a press conference in Seoul in this February 20 photo. The activist fund has led a shareholder alliance aimed at ousting the current leadership of Hanjin Group, including Chairman Cho Won-tae. Photo courtesy of Jeong Byung-hyuk/UPI News Korea

Sibling feuds continue ahead of shareholders’ meeting on March 27

Hanjin Group has been stuck in a controversy that the top management of its flagship unit Korean Air received kickbacks from European aircraft maker Airbus.

A shareholder alliance, which strives to oust the current leadership, including Chairman Cho Won-tae, recently claimed that Cho took charge of purchasing airplanes of Korean air when the bribes were given in the early 2010s.

The French court made it clear that there were illegal kickbacks,” said the alliance led by Chairman Cho’s sister Cho Hyun-ah and activist fund Korea Corporate Governance Improvement. “Airbus also admitted the fact.”

Early this month, Rep. Chae Yi-bae from the minor opposition Party for People’s Livelihoods disclosed the agreement between the Parque National Financier (PNF) and Airbus.

On January 31, Airbus reached a $4 billion settlement with French, U.S, and U.K. prosecutors over charges that it had offered bribes to win contracts in such markets as South Korea.

The agreement between the PNF and Airbus showed that Korean Air bought 10 airplanes from Airbus between 1996 and 2000 _ and Airbus doled out tens of millions of dollars to Korean Air through intermediaries between 2010 and 2013.

Findings from the investigation lead the PNF to consider that, in consideration of these purchase agreements, Airbus committed to pay an amount of USD 15 million to a former senior executive of the airline (Korean Air),” it said.

Rep. Chae and the shareholder alliance have asked the South Korean prosecution to start investigations into the case.

Hanjin Group countered that Chairman Cho Won-tae joined the group in 2003, years after the purchase of airplanes took place, so he had nothing to do with the suspicions.

The Seoul-based conglomerate also claimed that it is strange for the alleged bribery payments were done 10 years after the airplane contracts.

In response, the alliance hinted that Chairman Cho Won-tae might be involved in the scandal by claiming that he was in charge of buying airplanes of Korean Air when the kickbacks were paid.

Chairman Cho Won-tae and the alliance have been at odds ahead of the shareholders’ meeting of Hanjin Kal, the group’s holding company, on March 27.

The two sides are expected to stage a proxy war to control the mid-sized group. They are staging a stiff competition to secure the supports of shareholders.


This article is provided by UPI News Korea. _ ED.