KCGI vs. Hanjin KAL — Korea's First Chaebol Accountability Campaign

Hanjin KAL controls Korean Air — which holds roughly 40% of international passenger traffic at Incheon Airport — along with Jin Air, Hanjin Shipping, and Jeongseok Enterprise across 15 affiliates. Korean Air ranks among the world's top five air cargo carriers by revenue. As a pure holding company, Hanjin KAL had long traded at a persistent discount to the sum of its underlying assets (the 'holding company discount'). KCGI's investment thesis rested squarely on closing that gap by removing the owner-risk premium embedded in the share price.

Shareholder activism involves accumulating a stake and then pressing management for governance improvements, asset sales, or capital returns in order to unlock shareholder value. KCGI combined financial undervaluation arguments with a powerful social narrative around 'owner misconduct' — an early template for ESG-driven activism in Korea. The campaign's outcome influenced the subsequent wave of activism at KT&G (2023), Hyundai Motor (2019), and SM Entertainment (2023).

Hanjin KAL was established in 2013 as a pure holding company following a Hanjin Group restructuring. Its core asset is a 28.9% stake in Korean Air, complemented by controlling interests in Jin Air, Hanjin Shipping, and Jeongseok Enterprise across 15 affiliates. Revenue is generated primarily through subsidiary dividends, brand royalties, and rental income rather than direct operations. Hanjin KAL's shares had long been penalized by a holding company discount relative to Korean Air's intrinsic value — precisely the inefficiency KCGI sought to exploit.

The campaign resolved into a four-way ownership battle: ① Cho Won-tae family (~28%), ② Delta Air Lines (14.9%), ③ KCGI (~15%), ④ Bando Construction + Cho Hyun-ah (~10%). Delta's entry proved decisive — the long-standing Korean Air codeshare and joint venture partnership gave Delta strong strategic incentives to back Cho Won-tae, neutralizing KCGI's stake advantage and effectively deciding the March 2020 AGM.

Both sides deployed leading Korean financial and legal advisors. KCGI focused on independent valuation and legal pressure; Hanjin KAL focused on securing friendly stakes and mounting a legal defense.

Note: Advisor information is based on publicly available sources and may not reflect all engagements.

Unit: KRW 100 million (억원) | K-IFRS consolidated | Source: Hanjin KAL annual reports

KCGI's financial thesis was the persistent holding company discount on Hanjin KAL shares relative to the aggregate value of its underlying assets — most importantly its 28.9% stake in Korean Air. KCGI argued that eliminating the owner-risk premium embedded in the share price would unlock this discount. The post-campaign trajectory vindicated the thesis: the stock rose ~90% from KCGI's entry price before COVID-19 temporarily crushed it, then surged above ₩70,000 following the Korean Air–Asiana merger announcement.

Note: KCGI entry/exit prices and return estimates are derived from public disclosures and press reports and should be treated as approximations.

KCGI won economically but fell short of its primary structural objective — removing the Cho family from executive control. Cho Won-tae retained the chairmanship with Delta's backing and then went on to orchestrate the Korean Air–Asiana merger, one of the most consequential deals in Korean aviation history. Yet the campaign left a lasting imprint on Korean corporate governance: the NPS's unprecedented vote against Cho Yang-ho became a reference point for institutional investor activism, and KCGI's combination of financial and social argumentation set a template for future campaigns.