Comments by President Lee Jae-myung, followed by signals of support from major shareholder Korea Development Bank, have brought a possible relocation of HMM’s headquarters to Busan back into focus. Industry watchers say the company could replace three outside directors whose terms end next month, then call an extraordinary shareholders meeting to amend its bylaws to enable the move. Strong union opposition remains a key variable.
According to the industry on Wednesday, KDB Chairman Park Sang-jin said at a reporters’ briefing the previous day that the Ministry of Oceans and Fisheries and the Korea Ocean Business Corp. had presented a schedule to complete HMM’s move to Busan in March and April. “If the relocation is confirmed, we will actively support it,” Park said.
The remarks effectively put the plan on the record in line with the president’s campaign pledge. KDB and the Korea Ocean Business Corp. are HMM’s No. 1 and No. 2 shareholders, holding 35.42% and 35.08%, respectively.
The biggest obstacle is HMM’s bylaws, which specify that the company’s headquarters is in Seoul. The company must amend the bylaws at a shareholders meeting before it can begin practical work for a relocation.
A bylaws change requires a special resolution backed by at least two-thirds of the shareholders present. With KDB, the Korea Ocean Business Corp. and the National Pension Service holding more than 70% of HMM shares, the government could change the bylaws and move the headquarters to Busan if the item is put on the agenda.
Investment banking sources said the agenda for HMM’s annual general meeting scheduled for March 26 is not expected to include a bylaws amendment. No such item was included in shareholder proposals that closed earlier this month.
In the shipping industry, a widely discussed scenario is that KDB and the Korea Ocean Business Corp. replace three outside directors at the annual meeting, hold a board meeting in April to approve a bylaws-amendment agenda item, and then amend the bylaws at an extraordinary shareholders meeting in May. Practical work for the Busan move is expected to ramp up in the second half of this year.
HMM’s onshore union, which includes employees working in Seoul, is strongly opposed. The union is expected to begin rallies next week around the Yeouido area and to hold a strike-resolution rally in front of Cheong Wa Dae to block the relocation, according to reports.
Under current labor law, management decisions such as relocating a headquarters are generally not subject to lawful strike action. But that could change when the revised Trade Union and Labor Relations Adjustment Act, known as the “Yellow Envelope Act,” takes effect next month. If a management decision is interpreted as having a substantial impact on working conditions, it could be treated as a subject of labor disputes. If an HMM strike materializes, it would draw attention across business, labor and legal circles as a potential first major-company general strike after the law takes effect.
Separately, the Ministry of Oceans and Fisheries, the Korea Shipowners’ Association and the city of Busan surveyed association members on their willingness to relocate to Busan ahead of forming a relocation support consultative body. More than half of respondents were said to have expressed a negative view. An industry official said the advantages of keeping headquarters in Seoul — including communication with shippers and securing talent — outweighed incentives offered by the government and local authorities, adding that additional support measures by the government and ruling party appeared necessary.
* This article has been translated by AI.
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