Anchor: With the sudden death of late Hanjin Group Chairman Cho Yang-ho on Monday, industry watchers are eyeing on the group's succession and stabilization under new leadership.
Choi You Sun reports.

Report: Ranked as South Korea's 14th biggest conglomerate by asset size, Hanjin Group is the country's leading conglomerate in the aviation and transportation sector.

The group's late chairman Cho Yang-ho oversaw management until his sudden death on Monday. Hanjin said an emergency plan has been set in motion, with Cho's son Won-tae, the president of Korean Air, taking charge of the group's key management decisions.

During last month's shareholders' meeting of the group's holding company Hanjin KAL, Chief Executive Officer Seok Tae-soo, who is known to have close ties with the Cho family, was reappointed to the board of directors.

While Cho had all of his three children take part in the management of Korean Air and other affiliates, his daughters Hyun-ah and Hyun-min recently resigned from their managerial posts following revelations of their abusive behavior towards company employees.

As a result, the late chairman's son Won-tae will most likely take the helm from his father, while members of the Cho family are expected to draw support behind him so that the founding family does not lose control over the group's management.

The family, however, may face a dispute over the management once the late chairman's children pay a hefty inheritance tax.

The Cho family currently controls 28-point-eight percent of Hanjin KAL, followed by Korea Corporate Governance Improvement(KCGI) at nearly 13 percent and the National Pension Service(NPS) at around seven percent.

If the family ends up selling part of their stock holdings to pay for the inheritance tax, their stake could drop to nearly 20 percent, threatening their status as the biggest shareholder. 

Industry watchers suggest that the family may come up with the necessary funds either through loans or by increasing the dividends they receive.

The Cho family, whose combined holdings in Hanjin KAL and Hanjin are worth 122 billion won, should be able to borrow upwards of 61 billion won which can be used to pay the inheritance tax.
Choi You Sun, KBS World Radio News.