HHIC chairman remains overseas despite bipartisan summons to National Assembly

Posted on : 2011-07-30 06:23 KST Modified on : 2019-10-19 20:29 KST
Observers say Cho may be following a trend of executives leaving amid ongoing investigations

By Hwang Ye-rang

Where in the world is the chairman? This question has lingered since as of Friday, Hanjin Heavy Industries and Construction (HHIC) Chairman Cho Nam-ho, 60, was in his 44th day of an overseas business trip as protests multiply at HHIC’s Yeongdo shipyard. No date has yet been set for his return. The ruling Grand National Party (GNP) joined the opposition Friday in announcing plans to summon him for a National Assembly hearing, and on July 30 the third round of the “Hope Bus” Campaign is heading to Busan in support of Kim Jin-suk, a member of the Direction Committee for the Busan office of the Korean Confederation of Trade Unions (KCTU). Kim is currently in the 206th day of an aerial protest atop an HHIC crane. But Cho, the one who actually holds the key to resolving the HHIC layoff issue, has been conspicuous in his absence.

Cho left for an overseas trip on June 17, which happened to be the same day when the National Assembly’s Environment and Labor Committee made the decision to summon him in connection with the HHIC situation. In a June 20 notice, Cho informed the National Assembly that he would be unable to appear because he was going to be in Japan and Europe on a business trip between June 17 and July 2. Ultimately, the general meeting of the Environment and Labor Committee and the hearing failed to materialize.

More than 40 days have passed since then, but Cho has yet to return.

“Our understanding is that he is traveling to countries like Singapore and Japan to meet with foreign ship owners and officials at vessel equipment companies,” HHIC stated. “Since he decides his next stop in the field, we have no way of knowing when he will return.”

With a 46 percent share, Cho is the biggest shareholder in Hanjin Heavy Industries and Construction Holdings, the holding company for HHIC, as well as CEO of HHIC. While the company is arguing that Lee Jae-yong, the company’s president in charge of shipbuilding, could attend the hearing, as he is most aware of the layoff issue, authority for final decision-making unquestionably lies with Cho Nam-ho.

Cho is also a director at four affiliates, including HHIC.

Why is Cho traveling around the world when there are numerous issues urgently in need of resolution? The company explains that he is ordinarily out of the country for more than half of the year. But a number of shipbuilding industry observers are puzzled, saying that it is highly unusual for the CEOs of other shipbuilding companies to go on long-term business trips lasting more than 40 days. This is the reason speculation that Cho's trip is for evasive purposes is gaining credence.

Indeed, the same methods have been used by numerous business executives in the past. Former Daewoo Group Chairman Kim Woo-joong traveled overseas in 1999 to avoid an investigation by prosecutors, only returning to the country in 2005. Sejoong Namo Tour Chairman Chun Shin-il also left the country last year ahead of an investigation by prosecutors, coming back four months later.

Politicians as well as observers in the business sector have viewed his tactics unfavorably.

An executive at one of the four major conglomerate groups of South Korea said, “Frankly, Mr. Cho’s behavior is not desirable.”

“There is concern that politicians and the government are going to use Mr. Cho’s actions as an excuse to target all entrepreneurs for denunciation,” the executive added.

Please direct questions or comments to [englishhani@hani.co.kr]

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