The “nut rage” heiress who forced a plane to turn back over her macadamias failed Friday to wrest control of the family airline from her brother, in what analysts said illustrated the power of incumbents at South Korea’s chaebols.
Cho Hyun-ah, 45, whose family control the Hanjin group that includes flag-carrier Korean Air, made headlines worldwide with her furious reaction over an improperly served bag of nuts in first class.
The airline is now in the throes of a corporate crisis because of the coronavirus pandemic, with hundreds of flights canceled, staff going on unpaid leave, and executives taking pay cuts.
A months-long battle for control came to a head Friday at the annual meeting of Hanjin Kal, the holding company for the conglomerate, when Cho and an activist investment fund, Korea Corporate Governance Improvement (KCGI), sought to oust her younger brother Cho Won-tae from the chairmanship.
Cho Won-tae, backed by other family members and Korean Air’s US alliance partner Delta Air Lines, fended off the challenge, winning 56.67 percent support in a shareholder vote.
Hanjin is one of the multifaceted, family-controlled conglomerates known as chaebol that dominate business in South Korea and played a key part in its rise to become the world’s 12th-largest economy.
But several now stand accused of murky political connections and stifling innovation and smaller firms.
Many chaebol families retain only a small ownership stake in their companies, but maintain control through complex webs of cross-shareholdings between subsidiaries, and rapid promotions for family members.
KCGI had called for Cho Won-tae’s replacement with a professional businessman, accusing him of “repeated strategic mistakes” leading to Korean Air’s accumulated losses of 1.74 trillion won ($1.4 billion) over five years.