Asiana Airlines shareholders' lawsuit

   Hit. 365


Asiana Airlines had suffered an “inflight meal crisis” in which international flights were delayed or inflight meals were not loaded at all due to disrupted supply of meals since July 1st. Though this unprecedented “in-flight meal crisis” could have been prevented, negligence of Asiana Airlines’ executives and their abuse of business opportunities inevitably bore such results. 

 

However, last year Asiana Airlines requested LSG to invest a large amount of money in Kumho Holdings in exchange for another contract extension. As LSG, concerning about ‘misappropriation’, refused Asiana Airlines’ suggestion, the company refused to extend of contract. And then, as a new inflight meal supplier, Asiana Airlines selected a subsidiary of Hainan Group in China which acquired the 160 billion won of new bond with warrant (BW) issued by Kumho Holdings. 

 

According to Article 382-3 of the Commercial Law, the directors of the company must faithfully perform their duties in accordance with the company’s articles and statutes. Therefore, replacing the in-flight meal supplier with a new one for the benefit of Kumho Holdings rather than Asiana Airlines’ interests is considered a dereliction of duty. In addition, according to Article 397-2 of the Commercial Law (prohibition of the use of company opportunities and assets), directors should not use business opportunities that may benefit the company now or in the future for their or third parties’ benefit, without the approval of two-thirds of the board of directors. Against these provisions, Asiana Airlines executives are believed to have misappropriated the inflight meal business license for Kumho Holdings’s financing without a legitimate board resolution. In this case, as damages occurred due to the misappropriation of the company's opportunities under the Commercial Law, the directors who have committed such illegal acts and the directors who approve them should take joint liability. In addition, since the profits earned by third parties (Kumho Holdings) are regarded as damages to Asiana Airlines, Asiana Airlines' management is responsible for reimbursing at least the profits earned by Kumho Holdings through the interest-free borrowing.

 

 

Hannuri gathered minority shareholders of Asiana Airlines and filed a lawsuit against Chairman Park Sam-goo and other executives, to receive compensation for damages caused to the company due to their misappropriation of inflight meal business rights and unfair support to affiliates. This will give a warning for chairman of listed company who conducted illegal behavior for his private interests at the cost of the all shareholders of Asiana Airlines.