South Korean prosecutors said Friday that Choi Eun-young, ex-CEO of Hanjin Shipping, has been indicted on charges of insider trading. The prosecution alleges that Choi sold stock in Hanjin when she learned of the carrier's impending collapse, several days before the firm applied for a restructuring program and made its situation known to the public.
The charges did not mention Choi's daughters, Cho Yoo Kyung, 30, and Cho Yoo Hong, 28, who also sold stock in the run-up to the restructuring announcement. The family’s actions saved them from the losses incurred by Hanjin investors who did not sell early, authorities say. By the time Hanjin filed for bankruptcy protection at the end of August, its stock had lost 66 percent of its value. Bloomberg estimated Hanjin's total market value at $250 million earlier this year, but given its fiscal situation and the collapse of its operations, industry observers expect that the firm will be fully liquidated to pay back creditors.
Choi was summoned by the authorities in June, two months after she sold the stock, and she cooperated with the investigation. She has maintained that she had sold her stock to settle her own debts, and that she had no prior knowledge of Hanjin's situation. Separately, Choi admitted that she was not well-qualified to head up Hanjin Shipping: rather than winning the post in an impartial hiring search, she took over from her husband after his death. Many Koreans view this admission as symbolic of the difficulties facing the nation's chaebol system of family-run business conglomerates, which have often had challenges with succession planning.
After Hanjin's bankruptcy filing, Choi paid $9 million into a fund to help the carrier offload stranded cargo, responding to public pressure. She remains the chairwoman of the former Hanjin unit Eusu Holdings, the parent company for the freight forwarder Eusu Logistics.