Kim Jong-chul, CEO of Korea Aerospace Industries (KAI), stated on October 20 during a National Assembly hearing that there will be no changes to the governance structure without the consent of stakeholders. He expressed concerns about Hanwha Group's moves to secure management rights over KAI, warning of potential monopolistic practices and a possible decline in the aerospace industry ecosystem. The Export-Import Bank, KAI's largest shareholder, confirmed it has no plans to sell its current stake.
During the National Assembly's Finance and Economy Committee hearing on the Export-Import Bank, Kim said, "If Hanwha Group takes control of KAI, it could lead to monopolistic issues that would significantly undermine the competitive landscape. There is also a risk that the overall aerospace industry ecosystem could be weakened."
The hearing focused on Hanwha Group's increased stake in KAI and the Export-Import Bank's potential share sale. Earlier this year, Hanwha raised its stake to 15.89%, becoming the second-largest shareholder. The Export-Import Bank, which holds a 26.41% stake, reiterated that it has no plans to sell its shares. In response to inquiries from lawmakers about the possibility of selling KAI shares, Export-Import Bank President Hwang Gi-yeon stated, "Currently, there are no plans to sell KAI, but it is difficult to make definitive statements about future plans regarding sales."
Some lawmakers pressed Hwang about the Export-Import Bank's recent decision to initiate a consulting project worth approximately 1.8 billion won aimed at strengthening the competitiveness of the aerospace industry, noting the timing coincided with Hanwha exceeding a 15% stake. Lawmaker Kang Min-guk of the People Power Party questioned, "As soon as Hanwha secured over 15% of the shares, the Export-Import Bank initiated a consulting project related to aerospace, which it had never done before." Hwang responded, "I was not aware of Hanwha's stock purchase. The current scope of the consulting project does not include the disposal of KAI shares, but we are seeking various opinions."
Kim emphasized that the Export-Import Bank's stance on not selling its shares is beneficial for management stability. He agreed with the notion that KAI should be managed independently for the benefit of the national defense industry rather than for the interests of any group.
Regarding the possibility of Hanwha joining KAI's board, Kim took a cautious stance, stating, "While the possibility of entering the board through cumulative voting exists, I believe it is unlikely to happen immediately."
In response to a question from Democratic Party lawmaker Yoon Hu-deok about whether Hanwha had requested documents for management participation, Kim replied, "No responsible person has formally requested anything in writing, but I heard there were some discussions at the operational level."
The hearing also addressed issues related to engine defects in the domestically produced 'Miron' helicopters. Yoon pointed out that many of the 57 Miron helicopters are currently grounded due to engine problems and asked for solutions. Kim explained, "Operations and deliveries have been halted due to engine corrosion and cracks. We have worked with Hanwha and Safran, the original engine manufacturer, to identify the causes, and follow-up measures have been implemented."
He added, "We expect to receive the first improved engine from Hanwha this week, and after verification by the working-level verification committee on the 23rd, the Defense Acquisition Program Administration will decide on the resumption of production and deliveries."
Finally, Kim acknowledged concerns from employees and the local community but assured that essential aspects would be thoroughly maintained. He expressed hope that any changes in governance would proceed in a manner that promotes the development of the aerospace industry and strengthens K-defense competitiveness.
* This article has been translated by AI.
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