Watchdog looking into former chair’s disposal of Hanjin Shipping shares

Korea’s financial watchdog is reportedly looking into the disposal of Hanjin Shipping shares by its former chairwoman before news broke on the firm’s move to seek a creditor-led rehabilitation last Friday.

According to multiple reports, the Financial Supervisory Service suspects that Choi Eun-yeong, the shipping line’s chairwoman until 2014, may have gotten tips from company insiders about its fate and divested out of her equity investment in the firm before news reached the market, a violation of capital markets law. 

Choi and her two daughters sold off all their shares in the firm over several transactions between April 8 and 20. The total value of the 967,927 shares unloaded is slightly over 3 billion won ($2.6 million), based on the closing price on the days of sale, according to the FSS.

Hanjin Shipping’s board of directors on Friday decided to seek a debt settlement agreement with creditors, handing the firm’s management and fate over to Korea Development Bank and other creditors. The company has been struggling under mounting debt, as shipping rates have plunged on years of overcapacity and slowing marine trade worldwide.

Choi inherited control of Hanjin Shipping from her husband and former chairman Cho Soo-ho, whose older brother is Cho Yang-ho, the current chairman of Hanjin Group.

In 2014, Hanjin Group took control of Hanjin Shipping from Choi. 

By Lee Sun-young (milaya@heraldcorp.com)