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Proxy firm supports Cho Won-tae

ISS is recommending shareholders vote ‘yes’ for reappointment
Mar 17,2020
The world’s largest proxy advisory service has recommended the reappointment of Cho Won-tae as a director of Hanjin KAL as well as four others nominees, blunting an attempted boardroom coup by a group of shareholders including Cho’s sister.

Hanjin KAL owns 30 percent of Korea Air Lines.

Institutional Shareholder Services (ISS), the proxy advisor, did accept one of the recommendations made by the insurgent shareholders. The candidate is Kim Shin-bae, former SK Telcom executive.

The Rockville, Maryland-based company issued the recommendation on Saturday.

It said that Cho Won-tae’s expertise in the field justified sticking with him.

ISS did mention allegations against of Cho Won-tae related to the failure to pay Korea Air Lines employees for unused leave as a potential risk. It noted that the results of the investigation are still pending.

The approved candidates are: Ha Eun-yong, senior managing director at Korean Air Lines; Kim Seok-dong, former chief of the Financial Services Commission; Park Young-seok, business administration professor at Sogang University; and Choi Yoon-hee, a former professor at Konkuk University Law School.

The candidates who failed to win the support of ISS are Lim Chun-soo, CEO of Midas Private Equity and Lee Dong-myung, an attorney at Seoul’s Chueum law firm.

The decision came after a local advisory service made the same recommendation on Friday.

Korea Corporate Governance Service (KCGS), which advises the National Pension Service, a 2.9-percent owner of Hanjin KAL, proposed reappointing Cho Won-tae.

It abstained on the reappointment of two outside directors.

Kakao has reduced its stake Hanjin KAL, according to local media reports, taking its ownership down to 1 percent from 2 percent. A company spokesperson said that the company had been unloading non-core holdings and had no intention of joining a proxy fight.

Korean media outlets reported on Monday that Kwon Hong-sa, the chairman of Bando Engineering & Construction, a builder siding with the shareholders seeking to take control of Hanjin KAL’s board, requested an honorary chairmanship when he met Cho Won-tae last year.

Bando denied the report.

The annual shareholders’ meeting of Hanjin KAL is set for March 27.

Shares of Hanjin Kal rose 2.09 percent in trading Monday, while Korean Air Lines dropped 2.43 percent.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]