Tag: Hanjin

Is there anything Choi Soon-sil is not linked to at this point?:

Did scandal-mired Choi Soon-sil play a role in sinking Hanjin Shipping?

Rumors are rife that the shadowy confidant of President Park Geun-hye was an “invisible hand” blocking creditors’ financial aid to the troubled shipping company.

Pressed by snowballing debts, the nation’s No.1 shipper filed for court receivership in August, triggering chaos in the global maritime cargo transportation network. The company has since been forced to sell its core assets, including vessels that operate on its lucrative Asia-U.S. route, in a desperate effort to stay afloat.

There are allegations that decision-makers in the government and Hanjin’s key creditor, the state-backed Korea Development Bank, were positive about extending a lifeline to Hanjin with a cash injection or other measures until March. But an “invisible hand” cut in and abruptly stopped the process, according to the Joongang Ilbo daily.

The newspaper said Choi, 60, broke the deal because of Hanjin’s “lukewarm support” of two nonprofit foundations she controls. The organizations — Mir and K-Sports — were allegedly set up with tens of billions of won “donated” by Korea’s big companies and Choi siphoned funds from the organizations, like personal ATMs.

According to news reports, Hanjin wired a billion won ($877,500) to the organizations, which was less than the amount from other companies with smaller sales than Hanjin.  [Korea Times]

You can read more at the link, but it seems like anything remotely negative that has happened in Korea critics are looking for some way to link Choi to it.

https://twitter.com/geoffrey_cain/status/772958590965456896

It sounds like the critics of the Hanjin bankruptcy think the Korean government should have bailed them out like the US did the too big to fail banks in 2008:

Hanjin Shipping’s filing for court receivership is inflicting far larger-than-expected negative impacts both at home and abroad as major routes for trade are being suspended.

The government and creditors are facing growing criticism that they are responsible for having thrown global ports and traders into confusion.

About half of Hanjin’s fleet is stuck in ports around the world as the authorities there fear the shipper whose assets have been frozen is unable to pay fees.

The government will not be able to avoid criticism for underestimating the fallout of the bankruptcy of the world’s seventh largest shipper.

It is still pondering over contingency plans to contain the backlash, creating a task force to ensure there are no delays in the flow of cargo.

The Ministry of Oceans and Fisheries will lead the task force along made up of ranking officials from nine related ministries and agencies.

“The government will make sure that the fallout from Hanjin Shipping doesn’t lead to chaos in logistics or a transmission to the real economy including exports,” said Oceans and Fisheries Minister Kim Young-suk, after an emergency meeting held Sunday.

“We will closely cooperate to support damaged industries, taking all possible policy measures,” he said.

However, officials from the shipping industry criticize the government for allowing the shipper to go bankrupt without having drawn up proper countermeasures.

The most urgent problem is that exports may fail to arrive at their final destination on time as 68 of Hanjin Shipping’s vessels are stranded at sea worldwide as of Sunday. [Korea Times]

You can read more at the link, but it is pretty amazing that a huge company like Hanjin has gone into bankruptcy.  It seems like the simple answer is that another company buys Hanjin and then restarts operations with a fresh cash flow to pay the various port fees that are currently delaying shipping.

French President Francois Hollande (R) confers France’s highest decoration, the Grand Officer of the French Legion of Honor, on Hanjin Group Chairman Cho Yang-ho at a Seoul hotel on Nov. 4, 2015, in this photo released by the South Korean business group. (Yonhap)