Police conducted a search and seizure of Hanjin KAL(180640), the holding company of Hanjin Group that controls Korean Air Lines(003490) and others.
According to police on the 7th, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency's Major Crime Investigation Division recently executed search and seizure warrants at Hanjin KAL and elsewhere on suspicion of breach of trust under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes.
Police launched a compulsory investigation in connection with a case in which the civic group Committee for the People's Livelihood accused Hanjin KAL last year of contributing its treasury shares to its employee welfare foundation for the purpose of defending management control.
In May last year, the Committee for the People's Livelihood filed a complaint against Hanjin Group Chair Cho Won-tae and Hanjin KAL CEO Ryu Kyung-pyo, saying they "contributed 440,044 treasury shares (0.66%) to the employee welfare foundation to defend management control."
Although Chair Cho's side is the largest shareholder of Hanjin KAL, the possibility of a management control dispute has been raised in business circles as Hoban Group has steadily increased its equity. As of July this year, Hoban Group's Hanjin KAL equity stands at 20.15%. The gap with the equity held by Chair Cho and related parties (20.57%) has narrowed to within 0.5 percentage points.
However, other major shareholders of Hanjin KAL—Delta Air Lines (14.90%), Korea Development Bank (KDB) (10.58%), and the National Pension Service (5.11%)—are classified as friendly equity for Chair Cho's side. Considering this, Chair Cho's side's equity ratio is 46.0...