Operation Shut Down: A Damaging Police Raid
This week, South Korea-based bulk carrier operator Polaris Shipping faced a major setback when its headquarters in Seoul was raided by the police. Thorough investigations are underway following an embezzlement allegation that has shaken the company. The unexpected raid took place on a typical Monday morning as investigators rummaged through company documents, confiscating hard disks for further scrutiny.
The Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency revealed it’s hot on the heels of Mo Han and Mo Kim, the co-chief executives of Polaris Shipping. They’re accused of illicitly diverting a staggering KRW50bn, lending it to the enterprise’s holding company, Polar Energy & Marine, in what is believed to be an attempt to secure management rights.
Delaying the Inevitable: The Halting of Sale Plans
The damaging event has had a profound impact on the potential sale process of the embattled firm. Polaris Shipping was in the midst of assessing nearly 20 acquisition bids before this abrupt police intervention. These preliminary bids were requested in May and were evaluated on a case-by-case basis with the assistance of Lazard Asset Management.
However, the raid and criminal allegations have notably stymied what could have been one of the most compelling business transactions of the year.
Polaris in Context: A Big Player in Bulk Shipping
Notably, Polaris has a considerable footprint in the global shipping industry. The company stands out as one of the dominant large bulker operators internationally, with its fleet mainly comprising newcastlemaxes and substantial ore carriers. But perhaps it is most recognized for its involvement in the infamous Stellar Daisy sinking six years ago.
Pooling this with a series of other accidents that occurred in quick succession marks one of the most controversial themes in the 21st-century maritime industry.
A Common Pattern: Korean Shipowners on the Market
The ongoing saga enveloping Polaris speaks to a larger trend, as several Korean shipowners have been placed up for sale this year. When examining the South Korean landscape, it is impossible to ignore the presence of powerful entities such as HMM, Hyundai LNG Shipping, H-Line Shipping, and the tanker division of SK Shipping, all of which have had their own share of the limelight within the sale arena.
This trend perhaps reflects the economic pressures spurred by the pandemic along with other inherent business challenges that have compelled these industry titans to reevaluate their current operations.
