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The Hyundai Heavy Industries labor union surrounds the entrance of Hanmaum Center in Ulsan on May 31.
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Union responds by declaring legal action to oppose demerger
Hyundai Heavy Industries (HHI) abruptly changed the time and place of a general shareholders’ meeting on May 31 in order to pass a corporation demerger while avoiding labor unions seeking to block it. The union responded by ending its five-day occupation of the originally planned meeting site and announcing that it would be pursuing legal action, declaring both the meeting and the demerger as “inherently invalid due to the grave violation of procedure.” After the union’s occupation prevented shareholders from entering the Hanmaum Center in Ulsan’s Jeonha neighborhood where an ad hoc general shareholders’ meeting to approve the demerger had been scheduled for 10 o’clock that morning, HHI changed the time and place to 11:10 am and the University of Ulsan gymnasium in the Mugeo neighborhood and proceeded with the meeting. Within 10 minutes of the meeting’s opening being declared, HHI had voted to approve two motions, including approval for the demerger plan. “With 51,074,006 shares participating, or 72.2% of all shares, the demerger plan was supported by 51,013,145 shares, or 99.9% of all shares attending,” HHI said. A demerger is a special voting issue that requires the approval of at least two-thirds of shares present. Following the meeting’s approval, HHI plans to complete the demerger registration on June 4 and split into two companies: the subholding company Korea Shipbuilding and Marine and a business company that will continue to operate under the Hyundai Heavy Industries name. After completing a survey next month, HHI plans to submit a corporate combination notice to the Fair Trade Commission for the acquisition of Daewoo Shipbuilding and Marine Engineering. Earlier that day, a confrontation erupted when around 500 HHI-friendly shareholders, meeting preparation personnel, and order maintenance personnel arrived at the entrance of the Hanmaum Center access road around 7:45 am to access the original meeting venue, only to be blocked by around 2,000 union members (according to police estimates) who were occupying the area. After concluding that the union’s presence made it impossible to hold the meeting at the center, the company notified shareholders at the scene of a change in the meeting’s time and place at around 10:30 am. The company uses buses in front of the nearby Hyundai Hotel to transport supporting shareholders to the University of Ulsan gymnasium to proceed with the meeting. Belated learning of the change in venue, union members traveled to the university by motorcycle but were unable to stop the meeting. That afternoon, the HHI union ended its occupation of the Hanmaum Center, which had continued for five days since May 27. While a physical confrontation was avoided with the change in the meeting’s location, the Korean Confederation of Trade Unions (KCTU) and HHI union declared the meeting null and void and announced plans to pursue legal action. “Even though HHI workers, who own a roughly 3% stake through the employees’ stock ownership association, stand to suffer a serious blow to employment relations and union activities with the company’s demerger, they were not able to even attend the shareholders’ meeting, let alone express their opinions,” the union said. “A general shareholders’ meeting that does not guarantee the free attendance of shareholders is in violation of the law, and any motions passed are invalid,” it continued, adding that it would be “commencing an all-out concerted battle to have the general shareholders’ meeting declared null and void.” HHI replied that the change in the meeting’s location was based on lawful procedures and decisions, adding that the union rather than the company was in violation of the law with its occupation of the meeting venue. “The decision to change the location was made after a court-appointed meeting inspector [attorney] determined that the meeting could not proceed at the Hanmaum Center,” HHI said. The company went on to say, “Now that the procedures for the material demerger have been completed with this shareholders’ meeting, we plan to honor our all of our pledges to employees concerning employment stability and the continuation of collective negotiation.” “We will also be working to combat certain misunderstandings that have arisen in the local community during the process of the material demerger,” it added. By Sin Dong-myeong, Ulsan correspondent, and Choi Ha-yan, staff reporter Please direct comments or questions to [english@hani.co.kr]
