Published 15:57 IST, March 20th 2020
South Korean airline heiress gets support from activist fund in succession feud
Heiress of a South Korean airline has escalated the succession battle with his brother who inherited the chairmanship of Hanji Group after his father’s death.
Heiress of a South Korean airline, popular for her “nut rage” incident, has escalated the bitter succession battle with his brother who inherited the chairmanship of Hanji Group after his father’s death. Cho Hyun-ah, also known as Heather Cho, has been struggling to get a position in airline’s parent company and has often accused his brother Cho Won-Tae of disobeying late father’s wish to manage it together.
Heather has received support from an activist investment fund, Korea Corporate Governance Improvement (KCGI), to bring reform in South Korea’s family-controlled conglomerates known as chaebols. KCGI is of the opinion that reform will improve efficiency, employee engagement, and shareholder returns. Experts suggest that the struggle could mark a watershed moment in the chaebols that dominate the Korean economy.
Won-tae became the chairman of Hanji group after his father’s death and is also the chief executive officer (CEO) of Korean Air. Heather, who made international headlines for her anger over nuts served in a flight, said that her younger brother went against the wish of Cho Yang-ho, their late father and former chairman of Korean Air parent Hanjin Group.
Heather’s lawyers issued a statement on December 23 saying Won-tae has been unilaterally making management decisions. According to the statement, Won-tae remains insincere while making decisions regarding the management of the group and not aligned with the late chairman’s wish to lead the group with harmony.
Controversial behaviour
Both Cho sisters had faced criticism in the past for their behaviour which forced them to step down from their positions at Korean Air. While Heather was arrested in 2014 for throwing tantrums over the way macadamia nuts were served on a flight, her younger sister threw a drink at an ad agency worker during a meeting. Emily later apologised for her behaviour when police investigated in the incident and questioned her. After these incidents, the poor behaviour of members of elite families came under public scrutiny. The sisters had to relinquish their positions at Korean Air following a huge public outrage.
Updated 15:47 IST, March 20th 2020