KCGI "Regret over Hanjin Kal Injunction Dismissal... Efforts to Improve Corporate Value"

[Asia Economy Reporter Lim Jeong-su] Private equity fund KCGI expressed regret on the 1st over the court's dismissal of its injunction request to prohibit Hanjin KAL's third-party allotment capital increase.

The Seoul Central District Court's Civil Division 50 (Chief Judge Lee Seung-ryeon) dismissed the injunction request filed last month by Grace Holdings, a fund under KCGI, against Hanjin KAL to prohibit the issuance of new shares. KCGI argued that Hanjin KAL's third-party allotment capital increase infringed on the rights of existing shareholders for the purpose of defending the management rights of Chairman Cho Won-tae and others.

However, the court concluded, "The issuance of new shares by Hanjin KAL was carried out within the necessary scope to achieve the business objective of acquiring Asiana Airlines and managing the integrated airline, and it is difficult to see that the new shares were issued for the purpose of defending the management or control rights of Chairman Cho and the current management."

KCGI stated, "The court's decision will have a negative impact on the principles of market economy, the Commercial Act, and the capital market," and added, "Time and results will prove that KCGI's concerns about the restructuring of the airline industry and the pointed issues regarding this third-party allotment capital increase are sincere efforts for the national economy."

They continued, "Our commitment to publicizing the restructuring of the airline industry, the professional management system of the Hanjin Group, and an independent board of directors remains unchanged," emphasizing, "We will do our best to monitor the management and improve corporate value together with Hanjin KAL shareholders."