Hanjin Group’s emergency funding to Hanjin Shipping delayed again
Hanjin Group’s emergency funding to Hanjin Shipping delayed again
Posted September. 10, 2016 07:10,
Updated September. 10, 2016 07:51
Hanjin Group’s plans to inject emergency funding to settle the logistics troubles have been faced with a possible cancellation. Still, the 40 billion won of private funds provided by Hanjin Group Chairman Cho Yang-ho will be injected early next week.
While Korea Air held its second board meeting on Friday to finance 60 billion won backed by shares of overseas terminal and bonds of Hanjin Shipping, conclusions have not been made yet. “This does not mean that the board voted down the funding plan, but agreed to discuss again on Saturday,” said a Korean Air spokesman said.
However, the 40 billion won to be devoted by the Hanjin chairman is still far from unloading the stranded Hanjin ships. Moreover, the murky outlook may cast a dark shadow over the next hearing on Friday morning (local time) at U.S. Bankruptcy Court in New Jersey. Hanjin Shipping won a provisional ruling on Wednesday after filing a Chapter 15 petition, and the troubled shippnig carrier was ordered to submit plans for financing by Friday. However, ships may be stranded again at the U.S. shores when injection plans fail to meet certain requirements and the court receivership is dismissed.
The main issue at hand for the Korean Air board of directors was the possible breach of duty. Despite 100-billion-won funding from Korean Air and Chairman Cho, it is still uncertain that Hanjin Shipping could stand on its feet again, as the troubled carrier is already under corporate rehabilitation process (court receivership). Hence is the reason why the board members of Korean Air are contemplating upon the funding, as they will face a possible legal action from shareholders on charges of malpractice. Legal experts say that when a management is aware of a possible damage but pushes forward its funding plans, it is highly likely to be deemed as breach of duty, regardless of a payback.
“It is unlikely that the (Korean) prosecutors pursue criminal charges to Korean Air’s funding, as the government continuously pressed Hanjin Group,” said a legal expert in charge of the court receivership of Hanjin Shipping at the Seoul Central District Court. "But we also understand Korean Air’s concerns over a possible civil action from its shareholders.”
As of 5 p.m. on Thursday, a total of 89 ships including 73 container vessels and bulk carriers are stuck and floating on the international seas. The Korea International Trade Association estimated that a total of 258 export damage cases have been reported by 256 clients, with the total unpaid invoice projected at 111 million dollars.
On 11 p.m. on Friday, Hyundai Merchant Marine filled in Hanjin Shipping-operated routes to the American shores from Busan Port. With around 60 percent of containers consigned by domestic clients including Samsung and LG, a 4,000-TEU vessel (1TEU equals one 6-meter-long container) of Hyundai Merchant Marine will make a stop at Gwangyang, South Jeolla Province and dock at Los Angeles in the U.S. Furthermore, four additional Hyundai vessels will carry domestic exports to the U.S. starting next week on every Thursday.
김창덕기자 drake007@donga.com
While Korea Air held its second board meeting on Friday to finance 60 billion won backed by shares of overseas terminal and bonds of Hanjin Shipping, conclusions have not been made yet. “This does not mean that the board voted down the funding plan, but agreed to discuss again on Saturday,” said a Korean Air spokesman said.
However, the 40 billion won to be devoted by the Hanjin chairman is still far from unloading the stranded Hanjin ships. Moreover, the murky outlook may cast a dark shadow over the next hearing on Friday morning (local time) at U.S. Bankruptcy Court in New Jersey. Hanjin Shipping won a provisional ruling on Wednesday after filing a Chapter 15 petition, and the troubled shippnig carrier was ordered to submit plans for financing by Friday. However, ships may be stranded again at the U.S. shores when injection plans fail to meet certain requirements and the court receivership is dismissed.
The main issue at hand for the Korean Air board of directors was the possible breach of duty. Despite 100-billion-won funding from Korean Air and Chairman Cho, it is still uncertain that Hanjin Shipping could stand on its feet again, as the troubled carrier is already under corporate rehabilitation process (court receivership). Hence is the reason why the board members of Korean Air are contemplating upon the funding, as they will face a possible legal action from shareholders on charges of malpractice. Legal experts say that when a management is aware of a possible damage but pushes forward its funding plans, it is highly likely to be deemed as breach of duty, regardless of a payback.
“It is unlikely that the (Korean) prosecutors pursue criminal charges to Korean Air’s funding, as the government continuously pressed Hanjin Group,” said a legal expert in charge of the court receivership of Hanjin Shipping at the Seoul Central District Court. "But we also understand Korean Air’s concerns over a possible civil action from its shareholders.”
As of 5 p.m. on Thursday, a total of 89 ships including 73 container vessels and bulk carriers are stuck and floating on the international seas. The Korea International Trade Association estimated that a total of 258 export damage cases have been reported by 256 clients, with the total unpaid invoice projected at 111 million dollars.
On 11 p.m. on Friday, Hyundai Merchant Marine filled in Hanjin Shipping-operated routes to the American shores from Busan Port. With around 60 percent of containers consigned by domestic clients including Samsung and LG, a 4,000-TEU vessel (1TEU equals one 6-meter-long container) of Hyundai Merchant Marine will make a stop at Gwangyang, South Jeolla Province and dock at Los Angeles in the U.S. Furthermore, four additional Hyundai vessels will carry domestic exports to the U.S. starting next week on every Thursday.
김창덕기자 drake007@donga.com
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