SEOUL -- The children of the late Hanjin Chairman Cho Yang-ho failed to reach agreement on who will take the helm at the country's biggest transportation conglomerate which controls Korean Air Lines.
South Korea's Fair Trade Commission said that it would postpone the announcement of the leaders of the country's conglomerates to May 15 from Thursday as Hanjin had yet to submit its application for a new head. The company had been expected to appoint a new leader after Cho died of lung disease in Los Angeles last month.
"Hanjin said that it has not applied for the change of the leader because it failed to reach internal agreement on who will be the next leader," said the FTC in a statement. "The FTC will encourage Hanjin to submit documents by the deadline."
Hanjin is under pressure from a local activist fund to improve corporate governance and raise dividend payments. Korea Corporate Governance Improvement fund is the second largest shareholder of Hanjin-KAL, the group holding company, with a 14.84% stake. The Cho family is the largest shareholder with 28.93%.
The key contention within the family is over who will inherit the late chairman's 17.84% stake in Hanjin-KAL. Experts said widow Lee Myung-hee and all three children, Hyun-ah, Won-tae and Hyun-min, would end up with the stake under the inheritance law, rather than just Won-tae, the only son who became interim chairman two weeks ago.
Speculating on the internal jostle for power, Park Ju-keun, president of corporate analysis company CEO Score, said: "The two daughters may have asked the brother to give them affiliates of the group, such as a hotel chain and a budget airline, in exchange for accepting his leadership. Cho Won-tae may have refused to do so, delaying agreement on the leadership."
The two daughters have been suspended from management over recent controversies. Cho Hyun-ah, a former vice president of the airline, was forced to resign after she assaulted Korean Air cabin crew on a New York-Seoul flight in 2014 because she was unhappy with the way nuts were served to her in first class, forcing the plane to return to John F. Kennedy International Airport and causing a delay.
The other daughter, Hyun-min, resigned from her position as vice president of the airline last year after she allegedly physically abused an employee of an advertisement agency.