"Gathering Dust to Make a Mountain?" The Increasingly Complex Hanjin Kal Shareholding Battle

[Image source=Yonhap News]

[Asia Economy Reporters Yu Je-hoon, Bu Ae-ri] As Hanjin Group's shareholding structure becomes more complex, competition among stakeholders over management rights is intensifying. According to the aviation industry on the 21st, Kakao purchased a 1% stake in Hanjin KAL last year. The timing of the share purchase is known to be before the shareholder registry closure date of Hanjin KAL on December 26. Considering the stock price level at that time, the amount invested in the share purchase is estimated to be about 20 billion KRW.

Both companies explained this equity investment as a 'measure to strengthen business cooperation.' At the end of last year, Korean Air and Kakao signed a Memorandum of Understanding (MOU) for 'customer value innovation and business competitiveness enhancement,' agreeing to strengthen cooperation in the aviation and IT sectors.

The reason why public attention is focused on Kakao's move, which only holds a 1% stake, lies in Hanjin Group's shareholding structure where no shareholder has secured a firm advantage. The largest shareholder and related parties hold 28.93%, but former Korean Air Vice President Cho Hyun-ah (6.49%) has opposed Chairman Cho Won-tae (6.52%), creating uncertainty. Currently, family members Lee Myung-hee, advisor of Jungseok Enterprises (5.31%), and Cho Hyun-min, Executive Director of Hanjin KAL (6.47%), have not expressed their positions.

In addition, private equity fund KCGI (17.29%), Bando Construction (8.28%), and the National Pension Service (4.11%) are also involved, but their stances remain uncertain. Delta Air Lines, the third-largest shareholder (10.00%), is classified as an ally of Chairman Cho, but even including this stake, it is not easy for Chairman Cho to establish a firm advantage in the shareholding competition.

However, Kakao is cautious about overinterpreting this equity investment. When it formed a business alliance with SK in October last year, it also purchased a 1.5% stake to strengthen ties, so it is difficult to assign significant meaning to this.

Nonetheless, the industry expects that if the family feud is not resolved by the March shareholders' meeting, where Chairman Cho's reappointment as an inside director is at stake, even such a minority stake could have a meaningful impact. A Hanjin Group official said, "In the case of the holding company Hanjin KAL, as the management rights dispute has intensified, the shareholding ratio of large institutions and major shareholders is approaching 70%, so generally the influence of minority institutional investors or small shareholders is not expected to be large," but added, "If the shareholding competition becomes fierce, persuasion efforts toward minority institutions and small shareholders may also intensify." A Kakao official related to this said, "Exercising voting rights is a separate issue from involvement in the management rights dispute," and "It is not the stage to disclose details about that issue now."

The dominant analysis is that the decisive factor will be the decision of the 'three women.' Lee Sang-heon, a researcher at Hi Investment & Securities, said, "Currently, various scenarios are possible, making it difficult to predict the outcome," and added, "Ultimately, the key is what judgment these three women?the advisor Lee, former Vice President Cho, and Executive Director Cho?will make."