Attention is focused on the Korea Development Bank, a major shareholder holding significant shares in corporations undergoing restructuring. Discussions around the transfer of HMM (formerly Hyundai Merchant Marine) to Busan and the possibility of a management dispute over Hanjin KAL have emerged, as the direction of decision-making at the bank and the sale of equity could cause market fluctuations.
According to the financial sector on the 15th, the Korea Development Bank holds 33.73% of HMM equity as of the end of last year. Including the equity held by the Korea Maritime Promotion Corporation (33.32%), a public institution under the Ministry of Oceans and Fisheries, the total government equity is 67%. Last month, the Korea Development Bank and the Korea Maritime Promotion Corporation exercised their rights to convert HMM's perpetual bonds into equity, raising their stake to 72%.
The background of Lee Jae-myung, the presidential candidate of the Democratic Party of Korea, promising to transfer HMM's headquarters to Busan is this equity structure. During a campaign rally in Busan the day before, he said, "We will ensure that HMM, the largest shipping company, moves to Busan," adding, "It's not easy since it's a private company, but it won't be impossible with government equity participation." This suggests that since the Korea Development Bank and the Korea Maritime Promotion Corporation are major shareholders, the government could transfer the headquarters by exercising its voting rights at the shareholders' meeting and board of directors.
The Korea Development Bank has currently taken a step back regarding the issue of HMM's headquarters transfer. A bank official, when asked about the stance, noted, "The primary managing agency for HMM's restructuring is the Korea Maritime Promotion Corporation," avoiding a direct answer. Market experts agree that there is no problem with the Korea Development Bank exercising its voting rights regarding the transfer of HMM's headquarters. Lee Hyoseop, a senior researcher at the Capital Market Research Institute, stated, "It is not against market logic for major shareholders like the Korea Development Bank and the Korea Maritime Promotion Corporation to make management decisions based on their equity holdings and exercise their voting rights on key management issues."
However, there are claims that it is inappropriate for the Korea Development Bank to exercise its voting rights solely for political reasons or justification. The government amended the Enforcement Decree of the Korea Development Bank Act in 2020, limiting the exercise of voting rights to cases where it would have a significant impact on stock value or when applying for restructuring procedures such as rehabilitation or workout due to the management crisis caused by COVID-19. This is to prevent excessive government intervention in the management of private corporations. While HMM is not categorized as a company that receives support from the 'stability fund for key industries' specified in the enforcement decree, there are opinions that it should be placed on the same principles.
Amid growing concerns about a potential management dispute between the Hoban Group and LS-Hanjin Group, attention is also focused on the Korea Development Bank's 10.6% equity stake in Hanjin KAL. If the Korea Development Bank were to sell part of its equity to the Hoban Group, there is a possibility that management rights could shift. The bank acquired its equity in Hanjin KAL to facilitate Korean Air's acquisition of Asiana Airlines at the end of 2020.
The Korea Development Bank stated regarding the sale of Hanjin KAL's equity, "There are no plans for a sale." A bank official noted, "We have not yet accomplished the investment objective of enhancing the competitiveness of the domestic air transportation industry," adding, "Decisions regarding equity sales may be made after the industrial reorganization is complete."