Internal conflict is growing at South Korea's Hanwha Asset Management over the company's de facto restructuring of its fund management in the wake of the company's poor performance last year, when net profit plummeted 93% from 2021.
The company notified 40-50 permanent managers in charge of public and exchange-traded funds (ETFs) that their status would be changed to a contract position, according to people familiar with the matter on Tuesday.
Managers working on a contract basis who entered Hanwha Asset Management on the condition of eventual conversion to permanent status were informed that the transition would not be made.
Hanwha Asset Management had made all employees permanent after they fulfilled a two-year contract barring extenuating circumstances, with staff accepting this as a restructuring step. The company has 354 employees excluding executives and 219 asset management specialists.
Hanwha Asset Management's personnel move stemmed from its poor performance last year. The Korea Financial Investment Association said the company's net profit last year was 1.24 billion won ($950,300), or just 6.7% of 18.5 billion won earned in 2021 and narrowly avoiding a deficit.
Due to huge losses in venture investments in the first half of last year, last year's net profit was a far cry from 17 billion won in 2019 and 20.6 billion won in 2020.
Employees subject to the personnel reshuffle are strongly protesting the move, citing lack of due process and sufficient opinion gathering. They also say the company's breaking of its pledge to convert contract staff to full-time status made at the time of entry violates the "right to expect conversion to a permanent employee" as recognized by legal precedent.
"The company is pushing ahead with the conversion of each employee to contract status under a 'one by one' method,” one company employee said. “The company provided neither an explanation nor discussion of the staff reshuffle plan."
The company denied that any change to its personnel was made. "The choice was given of a full-time job or a contract position with many incentives," it added. "Our net profit fell due to temporary valuation losses but operating profit increased, so there is no reason to implement restructuring."
Write to Sang Hoon Sung at
uphoon@hankyung.com
