Kumho Asiana Group Chairman Park Sam-koo announced Thursday he would step down from all of his roles to take the blame for mismanagement, in a surprising turn of events just a day after the chairman of its rival Korean Air, Cho Yang-ho, was ousted from board membership.
“I will leave my role as the chairman of the group. This is a decision made to take responsibility for the group mired in (financial) difficulties,” Park said in an email sent to employees Thursday.
“The group will be run under the emergency management system centering on Lee Won-Tae, vice chairman of Kumho Asiana Group, for a while in order not to have a management vacancy. A reputable person will be appointed as group chairman in a short time,” he added.
Park will also resign from CEO positions at Asiana Airline, Kumho Industrial and Kumho Buslines.
Kumho Asiana Group Chairman Park Sam-koo (Yonhap)
Kumho Asiana Group currently faces a serious liquidity crisis due mainly to losses suffered by South Korea’s second-biggest air carrier, which accounts for more than 60 percent of the entire group’s sales and has debt more than six times its equity. The impact of the losses of Asiana Airlines is rippling through other affiliates -- Kumho Industrial, Kumho Buslines and Asiana IDT -- due to a complex governance structure.
Last week, auditor Samil PricewaterhouseCoopers declined to sign off on the financial statements of Asiana Airlines, saying it had not been provided with enough information to evaluate the airline’s provisional debt.
The move prompted the country’s main bourse, the Korea Exchange, to suspend trading of shares of Asiana, and two South Korean credit rating agencies, Korea Investors Service and NICE Investors Service, to warn they may cut ratings for the airline to junk status.
On Wednesday, the day before Park’s announcement that he would step down, the chairman met with state-run Korea Development Bank chief Lee Dong-gull to request that the KDB help Asiana Airlines recover trust in the financial market, according to the air carrier.
The carrier’s main creditor bank, the KDB, said Thursday, “We will map out multifaceted plans to normalize the firm’s management by closely working with Kumho based on an ongoing feasibility study and plans to be submitted by Kumho.”
“We also plan to push for re-signing of a memorandum of understanding with Asiana as soon as possible,” it added.
In April last year, the air carrier and the KDB signed a memorandum to improve the financial structure of the company for a year. The KDB plans to convene a creditors meeting next month to discuss measures, including the extension of the memorandum. In July last year, KDB Chairman Lee said the bank would “intervene” if the situation related to the carrier worsened rapidly.
On Thursday, the news of Park’s departure drove Asiana shares up, the first gain in nine days. Its shares closed at 3,520 won ($3.09) in Seoul, up 2.92 percent, after peaking at 3,935 won.
By Shin Ji-hye (email@example.com