NPS to withdraw from Hanjin KAL management

South Korea’s National Pension Service (NPS) has begun a discussion on excluding Hanjin KAL from the targets of its management participation, local media outlets reported on June 24.

According to the reports, members of the Trustee Responsibilities Committee of the NPS held a closed-door meeting on June 22 and discussed a plan to change the purpose of holding Hanjin KAL shares from “management participation” to “simple investment” or “general investment.” 

Since last year, the NPS has been continuously reducing its stake in Hanjin KAL. In addition, while discussing changing the purpose of holding shares from management participation to simple or general investment, industry watchers say that it means the NPS will not actively intervene in Hanjin KAL’s corporate management. 

And it seems that the ongoing dispute over Hanjin KAL’s management has been an important background for the NPS’ move.

As an institutional investor, the NPS might consider the falling return rate due to the deterioration of Hanjin KAL’s performance and the controversy over its neutrality in the ongoing dispute over management control of Hanjin Group, the Seoul Shinmun reported. It also said that the conflict over Hanjin Group’s management control is expected to become fiercer in the future as the pension plan supported chairman Cho Won-tae at Hanjin KAL’s shareholders’ meeting in March.

BusinessKorea reported that the move appears to be aimed at distancing itself from the feud between the Hanjin Group chairman and his elder sister over the control of Hanjin KAL, the holding company of Hanjin Group. And analysts say that the NPS is likely to remain neutral at next year’s regular general shareholders’ meeting where a vote showdown between the two sides will take place, local media said. (Reporting by Kyoungho Lee)