Hoban may become Hanjin KAL Corporation’s largest shareholder, but management control remains unchanged

As Hoban Group’s additional purchases of Hanjin KAL Corporation shares raised the possibility that it would become the largest shareholder, the group filed a business-combination report with the Korea Fair Trade Commission. Hanjin KAL Corporation is the holding company of Hanjin Group. Its current largest shareholder is Hanjin Group Chairman Walter Cho, who holds a 20.57% stake.
According to business sources on the 2nd, Hoban Group bought additional shares on the open market after becoming Hanjin KAL Corporation’s second-largest shareholder on July 10, with a 20.15% stake. At the time, the gap between its stake and that of Chairman Cho, then the largest shareholder, was 0.42 percentage points.
Believing that its continued purchases since July may have taken its stake above Chairman Cho’s, Hoban Group filed a business-combination report with the KFTC last month.
The Fair Trade Act requires companies whose total assets or sales exceed thresholds set by law to report a business combination when they come to hold at least 15% of the shares of another listed company, and when subsequent acquisitions make them its largest shareholder.
Hoban Group has said that its additional purchases of Hanjin KAL Corporation shares were a “simple investment.” However, now that it is also undergoing a KFTC business-combination review, some in the market have suggested that the group may have mergers and acquisitions in mind.
Industry insiders consider a transfer of control at Hanjin Group unlikely even if Hoban Group becomes the largest shareholder. Chairman Cho holds a 20.57% stake, while Delta Air Lines, which operates a joint venture (JV) with Hanjin KAL Corporation subsidiary Korean Air, holds 14.9% of Hanjin KAL Corporation, and Korea Development Bank holds 10.58%.
Both are regarded as allies of Chairman Cho. Their combined stakes alone far exceed Hoban Group’s. The National Pension Service also holds a 5.46% stake in Hanjin KAL Corporation and could be a factor.
Hanjin KAL Corporation plans to make a further disclosure when details about its largest shareholder are confirmed, or within one month. With the KFTC review still undecided, this can also be read as indicating that Hoban Group has not yet been confirmed as the largest shareholder.
[email protected] Kwon Jun-ho, Kim Yun-ho Reporter