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Internal Hyundai dispute may be resolved

Posted July. 28, 2000 13:56,   


Chung Mong-Hun, chairman of Hyundai Asan`s board of directors, says he is willing to compensate for the loss of Hyundai Heavy Industries, which was triggered by an expedient offer of payment guarantee to Hyundai Electronics Industries, by using his personal assets.

A source at Hyundai said that Chairman Chung, who is on an overseas trip, informed his intention by phone to offer his own money to compensate Hyundai Heavy Industries` losses. He said that Chung was considering various ways, including sale of his stake in Hyundai Electronics Industries.

If his plan is carried out, the dispute over the 240 billion won loss among Hyundai Heavy Industries, Hyundai Electronics Industries and Hyundai Securities is likely to be resolved quickly.

Officials at Hyundai Heavy Industries said that there was no official notice about the plan from Chairman Chung, noting that there was a change in the decision to file a lawsuit as a result of the directors` meeting.

It seems that HHI is expecting some tangible measures, including a concrete plan for compensation, rather than just making a verbal agreement. Noting that they had failed to collect money, even with a memorandum, and that the situation wouldn`t trigger a financial crisis, the officials said that they can hardly persuade shareholders and the trade union simply with a verbal promise.

For this reason, HHI is expected to file a lawsuit against Hyundai Electronics Industries as scheduled and then cancel it if there is a concrete offer. With Chung`s remarks that he would personally compensate for the losses, a dramatic solution to the problem is anticipated.

However, the group`s internal trouble will remain for the time being with the question that Lee Ik-Chi, chairman of Hyundai Securities, would have to assume the responsibility for the dispute.