Gov't seeks Chung's money for Hyundai

The government has decided to allow Hyundai to delay submission of its self-relief package. Instead, the government plans to demand contributions by Hyundai Asan Board of Directors` chairman Chung Moo-Hun`s private fund for the ailing group.

Korea Exchange Bank also demanded that Hyundai Group separate its automotive and heavy industries units from the group as soon as possible to lower the group`s debt to less than 4 trillion won. KEB also demanded the retirement of Chung`s family from group management and a censure top executives of insolvent affiliates.

KEB president Lee Yon-Soo said that the bank has communicated such a position to Hyundai over the phone and will send an ultimatum in a formal letter if there is no visible action by the group.

Bank officials said that the formal letter would include suggestions for large shareholders` participation in offering of new issues as part of proposals to secure liquidity. In this connection, chairman Chung Moo-Hun, the largest shareholder in Hyundai Engineering and Construction, might have to sell off his stocks to secure the fund for the capital increase.

Unless Hyundai submits a self-relief package that includes such points, the government and Korea Exchange Bank intend to put Hyundai under the corporate workout program by ending the agreement among banks to roll over Hyundai Engineering and Construction`s bonds.

At a press conference, new Finance-Economy Minister Jin Nyum made it clear that there wouldn`t be any policy change regarding Hyundai Group, stressing that Hyundai needs to sincerely implement the demands of its creditors.