Creditors seek Hyundai family retirement

The government and creditors of Hyundai Group called for the conglomerate to lower the ownership in Hyundai Motors by founder and former honorary chairman Chung Ju-Yung to less than 3% by this weekend to complete the Hyundai reform before the government cabinet reshuffle scheduled for next week.

They also requested a cut in Hyundai Engineering & Construction`s debt by 1 trillion won with the fund from Chung`s sale of equity ownership in Hyundai Motors. If the fund is inadequate for this debt reduction, Hyundai must sell its securities to raise the necessary money as part of its self-relief efforts.

In addition, the government and creditors called for the retirement of former chairman Chung and his two sons from the group`s management, as well as separation of Hyundai Heavy Industries from the group by the end of the year.

It is the first official demand by the financial authority for the withdrawal of the Chung family from the group`s management. So far, it has called for the withdrawal of some key members of the group, and now they have expanded the censure to the owners.

The three-point demand was conveyed verbally through the Korea Exchange Bank, the group`s main creditor bank.

An official of the creditors` group said that he had met with a senior Hyundai executive to call for implementation of the self-relief package, as well as for the completion of Hyundai Motors` separation from the group as soon as possible.

Hyundai officials replied that they would work out a detailed plan by the end of August, but the official urged them that the plan must be finalized by the end of this week.

Meanwhile, Lee Ki-Ho, presidential chief economic secretary, said that Hyundai might have to submit a firm self-relief package this week, adding that he understands Hyundai is working on various plans in this connection at the request of Korea Exchange Bank.