HMM on the 26th approved the appointments of outside directors An Yang-su and Park Hee-jin at its regular shareholders meeting. The union opposes both candidates because one is from the Korea Development Bank, HMM's largest shareholder, and the other is from Pusan National University.
The union says the company formed the board with appointments friendly to the major shareholder to push through President Lee Jae-myung's pledge of the "transfer of shipping corporations' head offices to Busan," and is protesting.
HMM held its 50th regular shareholders meeting at its headquarters in Yeouido-dong, Yeongdeungpo-gu, Seoul, on the morning of the day and approved as originally proposed the agenda item to appoint An Yang-su and Park Hee-jin as directors.
Opposition to the item amounted to 129,928 shares and 152,349 shares, respectively, equivalent to 0.02% of the shares present at the meeting (795,936,490 shares).
The candidates joined the board to replace those whose outside director terms expired that day, including Woo Soo-han, a Chung-Ang University professor of international logistics; Lee Gemma, a Kyunghee University professor of international studies; and Jeong Yong-seok, a former vice president at the Korea Development Bank.
Employee-shareholders at HMM pushed back. Jeong Seong-cheol, Chairperson of the HMM union, said at the meeting, "With the company facing the grave crisis of a head office transfer, outside directors represent only the major shareholder, so the board will not be run independently and transparently."
Jeong said, "A reasonable inference is that after today's shareholders meeting, the board in April will approve an amendment to the articles of incorporation for a head office transfer and move to amend the articles through an extraordinary shareholders meeting in May."
Jeong added, "The creation of a Busan maritime capital is being pursued for political purposes that have no value in the company's business judgment," and said, "If the board makes a transfer decision, it will face risks of massive expense and talent outflow, which would violate directors' duty of care and duty of loyalty under the Commercial Act."
Jeong also said, "If the head office transfer is forced through despite union opposition, a general strike will be unavoidable," adding, "That would severely affect national logistics and cause immeasurable damage, including customer churn and a decline in the credibility of shipping alliances."
CEO Choi Won-hyeok, who chaired the meeting, responded, "A director of a stock company must protect the interests of the company and all shareholders and treat the interests of all shareholders fairly," adding, "On the matter you raised, the board will fulfill its duties of due care and loyalty to ensure the best outcome for the company and shareholders."
The union plans to hold a rally to declare an all-out struggle on the 2nd of next month in front of the Cheong Wa Dae Sarangchae. The HMM union has held a sit-in since on the 11th in opposition to the director appointments.
With the approval of the director appointment item that day, the HMM board was composed of two inside directors (CEO Choi Won-hyeok and Executive Director Lee Jeong-yeop) and three outside directors (Seo Geun-woo, former chair of the Korea Credit Guarantee Fund (KODIT); An Yang-su; and Park Hee-jin).
At the meeting, there was criticism that the number of board members had been reduced and no shipping expert was included, but management countered that the board also had five members from 2019 to 2023 and that there was no legal issue, deflecting the criticism. Regarding the proposal to appoint a director recommended by minority shareholders, management asked that it be submitted for the next shareholders meeting in accordance with procedures.
A proposal to expand HMM's business scope was also made at the meeting. A minority shareholder asked, "Given the Middle East situation, shipping business profits may deteriorate. Do you have plans to invest in air logistics like other shippers?"
Chair Choi said, "Global shipping companies such as CMA-CGM are engaged in air logistics businesses, but HMM is pouring companywide capabilities into shipping logistics," adding, "HMM currently ranks eighth in the world with container ship capacity of 1 million TEU, but the gap with seventh place is 1 million TEU, so we need to focus more capabilities on the shipping institutional sector."
Choi continued, "Rather than air logistics, we should expand the bulk carrier business institutional sector we operate to minimize risks in the container ship business, and we also need to increase operating profit in overseas port terminal businesses," adding, "If we do not strengthen the fundamentals in these areas, achieving our mid- to long-term strategy targeted for 2030 could be quite inadequate, so we consider strengthening shipping capabilities the top priority."