[Asia Economy Reporter Yoo Je-hoon] Hanjin Group held a memorial ceremony to mark the first anniversary of the late Chairman Cho Yang-ho. According to the business community on the 8th, Hanjin Group held the first anniversary memorial ceremony for the late Chairman Cho Yang-ho at around 2 p.m. at Singal Family Cemetery in Hagal-dong, Yongin-si, Gyeonggi Province.
The memorial ceremony was attended by about 90 people, including the eldest son Chairman Cho Won-tae’s family, his wife Lee Myung-hee, Jeongseok Enterprise advisor, the youngest daughter Cho Hyun-min, Executive Director of Hanjin KAL, and other bereaved family members and group executives. However, Cho Hyun-ah, former Vice President of Korean Air, who is in a management rights dispute with Chairman Cho Won-tae, and her family did not attend the memorial ceremony.
Earlier, the bereaved family, including Chairman Cho Won-tae, visited Woljeongsa Temple in Pyeongchang-gun, Gangwon Province, in the morning to pay tribute to the deceased. The late Chairman Cho Yang-ho was a Buddhist, and it is said that he maintained a connection with Woljeongsa Temple, which his father helped to rebuild.
The first anniversary of the late Chairman Cho Yang-ho was held simply due to the novel coronavirus disease (COVID-19). No other memorial events were held besides the memorial service on that day.
Born as the eldest son of the late founder Cho Jung-hoon, Chairman Cho Yang-ho joined Korean Air in 1974 and devoted 45 years to the aviation industry, being recognized as a manager who established Korean Air on a solid foundation. Under Chairman Cho Yang-ho’s leadership, Korean Air overcame major internal and external adversities such as a series of airline accidents in the 1990s, the foreign exchange crisis (1997-1998), the 9/11 terrorist attacks (2001), the Severe Acute Respiratory Syndrome (SARS) outbreak (2003), and the Middle East Respiratory Syndrome (MERS) outbreak (2015), maintaining its status as a leading domestic carrier.
Building on this, Chairman Cho Yang-ho played a leading role in founding the international airline alliance SkyTeam and served as an executive in the International Air Transport Association (IATA). He also contributed to the successful bid for the 2018 Pyeongchang Winter Olympics as the chairman of the bidding committee.
However, his family history was not smooth. Early in the succession process, he faced a royal family feud represented by the term 'Jangsamisa,' and in his later years, the family was embroiled in various power abuse and legal controversies, starting with the 'nut rage' incident involving his eldest daughter, former Korean Air Vice President Cho Hyun-ah. Due to growing public outrage, he lost his position as an inside director at Korean Air, his lifelong workplace, shortly before his passing (April 8, 2019).
After Chairman Cho Yang-ho’s death, Hanjin Group’s third-generation management was officially launched under Chairman Cho Won-tae, but many challenges remain. The sibling rivalry between Chairman Cho Won-tae and former Vice President Cho Hyun-ah is ongoing. Chairman Cho Won-tae defended his management rights at the first round during the regular shareholders' meeting of Hanjin KAL with the support of his mother Lee Myung-hee, Jeongseok Enterprise advisor, his sister Cho Hyun-min, Executive Director of Hanjin KAL, and partner Delta Air Lines. However, the three-party coalition has announced a long-term battle including future shareholders' meetings, making the situation fluid.
Recently, the three-party coalition increased its stake in Hanjin KAL by purchasing 0.61% (about 365,000 shares), raising its shareholding to 42.74%. A business community official said, "Sibling rivalries within groups rarely end in a single decisive battle," adding, "Since the combined shareholding exceeds 40%, the dispute is expected to continue sporadically for several years."
To make matters worse, the business environment has also worsened due to COVID-19. Out of the 145 passenger aircraft owned by Korean Air, about 100 are grounded at the parking lot. With forecasts of trillion-won scale losses this year, Chairman Cho Won-tae faces the difficult task of overcoming the management crisis and resolving management rights issues simultaneously. Recently, Chairman Cho Won-tae appointed former Financial Services Commission Chairman Kim Seok-dong, who was newly appointed as an outside director, as the chairman of the board to initiate governance improvements, and has begun actively selling idle assets as part of self-rescue efforts. For employees, measures such as executive salary returns and a six-month rotational paid leave system are being implemented or discussed.
A Korean Air official said, "Considering that the impact of the COVID-19 crisis may continue until the end of the year, we are establishing management plans," adding, "Trimming excess assets such as selling idle assets will continue."
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