Kumho Asiana says its chairman to resign

(ATTN: ADDS group chairman's comments from para 10)
By Nam Kwang-sik
SEOUL, July 28 (Yonhap) -- Kumho Asiana Group said Tuesday its chairman will
resign from his post to pave the way for a professional manager to guide South
Korea's eighth-largest conglomerate.

The surprise announcement comes as Kumho Asiana is reportedly suffering from a
cash crunch in the wake of its purchase of Daewoo Engineering & Construction Co.,
South Korea's top builder, in 2006.
Kumho Asiana said Park Sam-koo will stand down and serve as a honorary chairman,
while Park Chan-koo, chairman of the group's chemicals division, will also step
down from his position. The two executives are the third and fourth sons of the
group founder.
Park Chan-bup, vice chief of the airline division who has worked with the group
for more than 40 years, will be promoted to the post of chairman, it said.
"The decision is aimed at allowing a professional manager, instead of founding
family members, to take management control of the group," the group said in a
statement.
Kumho Asiana, which owns the nation's second-largest passenger carrier, Asiana
Airlines, has been dogged by growing concerns over its liquidity condition since
it bought a 72.11 percent stake in Daewoo Engineering & Construction in June 2006
for 6.42 trillion won (US$5,20 billion), 3.5 trillion won of which was funded by
banks and other financial firms.
At the time, the group offered a put-back option under which it promised the
financing providers it would buy back the builder's shares by December 2009 if
the stock price fell below 32,000 won.
Daewoo Engineering shares hovered above 30,000 won in late 2007, but have
continued to slide on concerns about a slowdown in the construction sector. They
closed at 12,900 won on the Seoul bourse on Tuesday.
Last month, Kumho Asiana said it will sell its stake in Daewoo Engineering &
Construction and other assets in an effort to ride out a cash shortage.
Earlier in the day, Korea Kumho Petrochemical's board of directors decided to
remove its head, Park Chan-koo, from his post.
"I decided to resign from my post today, taking responsibility for the situation
that I had no choice but to remove my brother from his post to put the group back
on track," Park Sam-koo told reporters.
"The group has been plagued by rumors over its credit crunch and dispute over
management rights, as my brother (Park Chan-koo) violated the group's joint
management rule for his own interest," Park said.
Four sons of Kumho Asiana Group made it a rule to jointly manage the group by
jointly owning stakes in the group's subsidiaries.
However, Park Chan-koo sold his entire stake in Kumho Industrial Co., a
construction unit of of Kumho Asiana, and increased his stake in Korea Kumho
Petrochemical Corp., a de facto holding company of the group, to dominate it.
ksnam@yna.co.kr
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