Hanjin Shipping’s former chairwoman Choi Eun-yeong has come under scrutiny by financial authorities over suspicions that she might have used insider information to sell her shares in the troubled firm.
According to sources Tuesday, the former chief and her two daughters sold their 970,000 company shares -- 0.39 percent of the total shares -- worth 3 billion won ($2.6 million) three days before the company’s board of directors decided to file for creditor-led rehabilitation on Friday.
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Hanjin Shipping’s former chairwoman Choi Eun-yeong |
As market rumors about the debt restructuring of the nation’s biggest container carrier began circulating, the company’s share price plunged from the 3,000-won level to as low as 1,800 won. By selling their shares, Choi’s family reportedly avoided losses of more than 500 million won.
If found guilty of insider trading, she will be subject to a fine of up to 10 billion won and maximum of 10 years in prison under the Capital Market Act.
Choi, who is currently head of Eusu Holdings (formerly Hanjin Shipping Holdings), is the wife of late Cho Soo-ho, whose older brother Cho Yang-ho is the current chairman of Hanjin Group.
After her husband died in 2006, Choi took over the top position in 2007, which she handed over to Cho Yang-ho in 2014 as the business conditions worsened. When she resigned, she pocketed nearly 10 billion won in compensation although the company posted more than 1.8 trillion won in net loss in 2013 and 2014.
With public anger growing over chaebol families’ continued moral hazard, the government began an investigation into Choi’s allegedly unfair stock trading.
Financial Services Commission chairman Yim Jong-yong told reporters on Tuesday, “The FSC’s capital market investigation team began a direct probe yesterday as Choi is suspected by many of unfairly selling her shares.”
“If she is found to have violated laws, we will strongly hold her responsible,” he added.
According to a close source, the FSC’s investigation would not be just a gesture and the probe team would raid her house and office as early as this week.
Creditors, who also appear to be outraged at her allegedly unfair stock trading, are expected to call on Choi and chairman Cho to be morally responsible for the poor management.
“Creditors discussed ways to call on the chiefs to spend their personal money to revive the company and hold responsibility of the poor management, as done by Hyundai Group chairwoman Hyun Jeong-eun,” said one creditor, who declined to be identified.
Hyun -- although she also came under fire for pocketing more than 7 billion won from the troubled Hyundai Merchant Marine and Hyundai Elevator from 2013 to 2015 -- spent 30 billion won from her own pockets during Hyundai Merchant’s debt restructuring in March.
By Shin Ji-hye (
shinjh@heraldcorp.com)
