Sewol Ferry Major Shareholder Lodges Receivership Application

Posted by George Backwell
Monday, June 23, 2014
Sewal capsized: Photo Korea CG

The major shareholder of the South Korean operator of the ferry on which hundreds of high school students drowned in April has applied for receivership, a court said on Monday.

Chonhaiji Co Ltd, a ship block maker and the major shareholder of ferry operator Chonghaejin Marine Company, lodged its application at the Changwon District Court last week, a court official said.

Chonghaejin Marine owned the Sewol, which sank on April 16 on a routine journey between the mainland port of Incheon and the holiday island of Jeju. Of 476 passengers and crew on board, including 339 students and teachers from the same school, 172 were rescued with the remainder presumed drowned.

Chonhaiji had 34.8 billion won ($34.19 million) in outstanding debt to main creditor Korea Development Bank as of last week, the bank's spokesman said.

The company, which owned 39.4 percent of the ferry operator as of end-2013, reported a net profit of 1.01 billion won last year. But it missed some debt repayments due last month as its business suffered in the aftermath of the disaster.

The court has not yet decided whether to grant the company protection from debtors or to order its liquidation, the official said on condition of anonymity to avoid being associated with the ferry accident.

Chonhaiji is one of the companies that were controlled by the sons of an elderly businessman, Yoo Byung-un, who is the co-founder of the church which owns the website www.god.com, and has evaded South Korea's most intense manhunt for a month.

Yoo and his sons, also having evaded capture, are wanted for charges ranging from embezzlement and negligence to tax evasion.

(By Joyce Lee)

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