Anchor: Shareholders of South Korea's flagship airline Korean Air have decided to remove the company chief and founding family member Cho Yang-ho from its board of directors. This is the first case to be affected by the recently-adopted stewardship code in the country.
Choi You Sun has this report.

Report: Sixty-four percent of Korean Air's shareholders approved reappointment of Cho Yang-ho as director of the board during their annual meeting on Wednesday.

The number is about two-and-a-half percentage points short of what Cho needed to retain the position, as he required support from two-thirds of the shareholders in attendance.

Cho's reappointment was not put to an actual vote as a prior count of proxies had already determined that a third of shareholders would reject the motion. 

The 70-year-old lost control of South Korea's flagship carrier 20 years after taking the helm from his late father and Hanjin Group founder Cho Choong-hoon in 1999.

It's also the first time that shareholders voted to take away management rights from the head of a conglomerate after the National Pension Service(NPS), the country's biggest institutional investor, adopted what is known as a stewardship code last July.

The stewardship code is a set of principles or guidelines aimed at getting institutional investors to actively engage in corporate governance in order to advance the interests of shareholders.

The NPS, which is the airline's second-biggest shareholder with an eleven-point-56 percent stake, has played a key role by deciding to reject Cho's reappointment.

They cited Cho's track record of "hurting the corporate value and rights of shareholders," after he was indicted on allegations of embezzlement and dereliction of duty that amounted to about 27 billion won.

Cho's family has been questioned by law enforcement officials for allegedly assaulting employees and illegally hiring foreign housekeepers.

Since Cho's family and those favorable to him still hold the largest stake in Korean Air at 33-point-35 percent, it is expected he will attempt to exercise influence in management through the airline's holding company Hanjin KAL.
Choi You Sun, KBS World Radio News.