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Korean Air to strengthen governance
February 7th 2020
Korean Air (KAL) said this week it would sell one of its investment properties in downtown Seoul and dispose of a leisure business as part of efforts to improve its financial position. Read More » It also will establish a governance committee to ensure management transparency.
The airline group said on February 6 it would offload a property in Songhyeon-dong. It had purchased the land in 2009 and had planned to develop the property, located near the Gyeongbok Palace, into a cultural complex. However, ongoing difficulties had hampered efforts to get the project off the ground.
"Korean Air faced multiple development challenges such as building height restrictions and cultural asset preservation," the company said.
Korean Air said Wangsan Leisure Development Co subsidiary, which runs the Wangsan Marina report in Incheon, also would be sold. "An additional large and long-term investment would be required to create profitability," KAL said.
Meanwhile, KAL said internal director, Kee-Hong Woo, had stepped down from its Outside Director Recommendation Committee, with outside director Dong-Jae Kim appointed as a new member.
As a result, the Outside Director Recommendation Committee would be comprised of only outside directors to ensure the committee’s independence. The decision followed the passing of a resolution to "strengthen the independence of its board of directors and improve governance transparency".
“Korean Air is determined to maximize shareholder value. The resolutions were passed to reflect the company’s strong will to improve its financial position and create a sound and transparent governance structure,” said a KAL spokesman. “We are fully committed to meeting these goals.”
KAL’s most recent financial results showed net profit fell 21 per cent to KRW211.8 billion (US$179.18 million) in the three months to September 30 2019, from KRW268 billion in the prior corresponding period. Revenue declined 3.7 per cent to KRW3.28 trillion, KAL reported in its third quarter financial results on November 15.
