Asiana 'Cargo Business Division Sale' Injunction First Hearing Sees Union and Management Clash

First Hearing at Seoul Southern District Court on the 6th
Union Side: "Breach of Trust and National Asset Outflow"
Company Side: "Legitimate Self-Help Measures"

At the first hearing held after the Asiana Airlines Pilots Labor Union filed an injunction to suspend the resolution to sell the cargo division, a tense exchange took place between the union and the company.

Asiana Airlines A321NEO aircraft. Yonhap News

The Civil Division 51 of the Seoul Southern District Court (Presiding Judge Kim Woo-hyun) held a hearing on the injunction to suspend the effectiveness of the board resolution regarding the sale of Asiana Airlines' cargo division, requested by the Asiana Airlines Pilots Union, on the afternoon of the 6th.

On this day, the union's lawyer argued, "The board's resolution is a breach of trust that weakens the company's competitiveness and an act of national wealth outflow." The union stated, "The merger of the two companies itself was promoted under the leadership of the Korea Development Bank, and there was no mention of selling the cargo division elsewhere in the merger plan by the Korea Development Bank. Therefore, the board resolution appears to be aimed at strengthening the controlling shareholder's power regardless of merging the two companies to enhance competitiveness."

They added, "Yoon Chang-beom, an outside director who participated in the resolution, is a special interested party, yet he took part, which is a procedural defect. Furthermore, the company failed to fulfill the notification obligations stipulated in the original contract, and on the grounds of obstructing collective bargaining rights, we claim the board resolution is invalid and seek suspension of its effect due to the protected rights."

On the other hand, Asiana Airlines' lawyer stated, "Even if the effectiveness of this resolution is suspended, Korean Air's submission of a corrective action plan will not be reversed. Therefore, there is no practical benefit to the injunction nor any disputed rights relationship." They continued, "Considering the overall background, this merger and acquisition was conducted for the purpose of normalizing company management and cannot be regarded as a breach of trust."

Additionally, the company explained, "Outside director Yoon was merely an advisor at Kim & Chang law firm, and according to the interpretation of the Commercial Act and Supreme Court precedents, he is not a special interested party. Even if he were considered a special interested party, if he is included in the quorum for attendance but excluded from the quorum for voting, there is no problem with the board resolution."

Earlier, on the 28th of last month, the Asiana Airlines Pilots Union filed an injunction requesting the invalidation of the board resolution approving the sale of Asiana Airlines' cargo division. This was based on their position that they cannot accept the corporate merger between Korean Air and Asiana Airlines. They also demanded the disclosure of the integration plan submitted by Korean Air and approved by the Korea Development Bank.