'Nut Rage' Heiress Leads Coup to Overthrow Younger CEO Brother

Singapore: After earning global infamy in what became known as the "nut rage" incident, heiress Heather Cho is poised for another fateful turn as she helps engineer a shareholder revolt against her brother atop one of South Korea's biggest conglomerates.

The former executive, who threw a tantrum and ordered a steward off a Korean Air Lines flight after she was served nuts in a bag rather than a bowl, is seeking to wrest control of the group that includes the carrier and a suite of hotel and logistics businesses. Heather Cho's alliance has demanded the empire's leadership, including brother Walter Cho, 44, be replaced by "professional managers".

The sibling rivalry has spilled across the local press for months since Heather Cho, 45, lent her support and voting rights to an alliance that includes an activist fund, which happens to be the biggest shareholder in the flagship Hanjin Kal Corp. The rebel shareholders have pushed for Walter Cho's removal as a board member, a seat that's up for a vote March 27.


Yet rather than undermine investor confidence in Hanjin Kal, the family feud has sparked a rally in the shares as Walter Cho has signalled he'll go along with some activist demands that he sell non-core assets like hotels.

Also, Delta Air Lines Inc has increased its stake, strengthening the alliance against Heather Cho. Hanjin stock has almost tripled over the past 12 months and rose to a record on March 4. The shares have rallied 67% since Feb. 20, even as the coronavirus crisis has been slamming aviation and tourism companies.

The dispute over who should run the Hanjin Group has helped boost the value of the Korea Corporate Governance Improvement fund's stake to about $739 million as of Thursday, an early reward to the cornerstone of Heather Cho's alliance. Still, the revolt has sent a signal that pressure for governance reforms hasn't been gaining traction, said Park Ju-gun, president of corporate governance researcher CEOScore.