Walter Cho was re-elected as the chairman of Hanjin KAL at an annual general meeting held on 27 March.
Hanjin KAL, the parent group of Korean Air, is controlled by the Cho family. Walter Cho succeeded his father, the late Cho Yang-ho, as head of Hanjin KAL in 2003. He took over as Korean Air’s chairman and chief executive after Cho senior’s death in April 2019.
The carrier tells Cirium that the younger Cho received support from nearly 57% of 3,600 shareholders who voted, with a collective equity stake of just under 85%.
Two other nominees, Sin-Bae Kim and Gyeong-tae Bae, had their nominations rejected. Reference material prepared by Hanjin KAL for the meeting describes Kim as a former chairman of SK Corp, while Bae is a former vice-president at Samsung Electronics.
Kim was nominated by a three-party alliance that has demanded that Walter Cho be replaced by professional managers. This alliance comprises Cho Hyun-ah, the private equity fund KCGI, and Bando Engineering & Construction, which hold 6.5%, 18.7%, and 16.9% stakes in Hanjin KAL, respectively, amounting to a collective 42% stake.
Walter Cho, his family members and affiliates hold a 22.2% stake, while Delta Air Lines recently increased its stake in Hanjin KAL to 14.9%
Cho Hyun-ah is Walter Cho’s sister and the eldest of the late Cho Yang-ho’s three children. Youngest sibling Emily Cho and Cho Hyun-ah both stepped down from their executive positions at Korean Air in April 2018.
Walter Cho says in a statement issued after the shareholders’ meeting: “The meeting served as an opportunity to hear the voices of various shareholders and employees, and will act as a stepping stone in the future development and growth of Hanjin Group.
“Hanjin Group will now start afresh, respecting the wishes of the people.”
He reiterated the difficulties faced by the airline industry due to the coronavirus, while stating that over 90% of Korean’s aircraft are grounded.
“All of us at Hanjin Group are devoting our efforts to overcome the crisis. We will take necessary self-help measures to improve our financial structure. In addition to the previously announced sale of idle assets, we will actively seek to raise funds by consulting the board of directors.”