April 24, 2019 / 10:06 AM / 2 months ago

UPDATE 1-Korean Air parent appoints heir apparent Cho Won-tae as new chairman

* Hanjin Group appoints only son of late chief Cho Yang-ho as new chairman

* Inheritance tax for late Cho may exceed $148 million - analysts

* Successor needs to boost stake in Hanjin Kal to maintain control (Adds details of appointments, background)

SEOUL, April 24 (Reuters) - South Korea’s Hanjin Group, parent of Korean Air Lines, appointed Cho Won-tae on Wednesday as its new chairman to replace his father Cho Yang-ho who died earlier this month.

The younger Cho, 43, was also appointed co-chief executive of Hanjin Kal, the holding company of Hanjin Group.

Cho Yang-ho died of chronic illness earlier this month, weeks after shareholders ousted the tycoon from the board of the country’s biggest carrier.

“The appointment of Cho Won-tae as a new CEO is to minimise leadership vacuum of Chairman Cho Yang-ho and to continue stable management of the group,” Hanjin Group said in a statement.

The junior Cho started his career at Hanjin Group’s affiliate, Hanjin Information Systems & Telecommunication Co Ltd, in 2003 in a sales and planning position, and later moved to Korean Air in 2004. He is currently the president and a board member of Korean Air.

Analysts have said the death of the senior Cho would raise the possibility of a bidding war over the 70-year old patriarch’s stake in Hanjin Kal, but his family would fight to defend control of the airline.

The inheritance tax the family needs to pay may amount to around 170 billion won ($148 million), worth half the entire Hanjin Kal stake held by Cho, some analysts estimate.

The senior Cho held a 17.8 percent stake in Hanjin Kal. Cho, his relatives and the family’s academic foundations own a total 29 percent of the holding firm.

On Wednesday, local activist fund KCGI, the No.2 shareholder of Hanjin Kal after the Cho family, said it boosted its stake in Hanjin Kal to 14.98 percent from 12.8 percent.

KCGI has said it will take a role in the management of Hanjin Kal. (Reporting by Heekyong Yang; Additional reporting by Hyunjoo Jin; Editing by Muralikumar Anantharaman)

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