Kumho-Asiana-tycoon-steps-down
Kumho-Asiana Group Chairman Park Sam-koo/Courtesy of Kumho-Asiana Group

Chief executives of flag carriers suffer setbacks

Heads of Korea’s two flag carriers quit their jobs in two days _ one was ousted, and the other decided to leave the top position amid the uproar over an audit report.

Kumho-Asiana Group said on March 28 that Chairman Park Sam-koo will resign as the conglomerate’s head and CEO of its iconic subsidiary Asiana Airlines, the country’s second-largest airline firm.

Park decided to step down to take responsibility for the controversy regarding the audit report, which resulted in chaos in the market,” an Asiana official said. “We plan to appoint an outside manager as group chairman as soon as possible so that Asiana can get back on track.”

Last week, Asiana’s auditor of Samil PricewaterhouseCoopers declined to sign off its 2018 financial statements of the carrier citing a lack of information. This prompted the Seoul bourse to suspend trading of its shares.

Samil changed its stance this week to endorse the 2018 financial statements of Asiana, but share prices continued to tumble due to concerns over its financial health.

Currently, Asiana owes about $2.8 billion to lenders and other financial outfits, and the Seoul-based entity is required to repay a third of the amount this year.

Asiana netted a loss of $94.4 million last year. Its debt is equivalent to over seven times its equity.

The news of Park’s departure came a day after the shareholders’ meeting of Korean Air where Hanjin Group Chairman Cho Yang-ho was kicked out of the boardroom as he failed to get re-appointed. Korean Air is a cross-city competitor of Asiana.

In a proxy war involving the National Pension Service, 64.09 percent of shareholders voted in favor of Cho’s re-appointment, which fell just short of the required approval of two-thirds.

As a result, the scandal-ridden businessman was forced off the board. The 70-year-old has led Hanjin over the past two decades but recently suffered setbacks _ he is now on trial for allegedly embezzling about $18 million.

 

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