Korean Air-Asiana integration draws backlash

A high-profile aviation deal between Korean Air and Asiana Airlines is facing a continuing strong backlash from a coalition of the former's shareholders who argue the decision is aimed at defending the managerial rights of Cho Won-tae, the chairman of Hanjin Group, the airline's parent corporation. The opposition is centered on the Korea Development Bank's (KDB) participation in Korean Air's takeover of Asiana. The coalition ― consisting of former Korean Air Vice President Cho Hyun-ah, the Korea Corporate Governance Improvement (KCGI) private equity fund (PEF) and Bando Group ― is stepping up criticism of the state-run lender and Hanjin Group for pushing ahead with the deal that they argue will end up securing the leadership of Chairman Cho through the use of taxpayers' money. Following the KDB announcement Monday, the KCGI started legal consultations with its advisory firm, Bae, Kim & Lee (BKL), to block the move. The PEF denounced the alliance between the KDB and Chairman Cho claiming they carried out the deal in a slipshod and hasty manner, as Korean Air has not conducted any due diligence on Asiana. "Their plan to take over Asiana Airlines, which is in a state of capital erosion and whose total debt reaches 12 trillion won, comes at a huge cost to other shareholders," the KCGI said Tuesday. <br/>