Go to contents

Hyundai Motor chairman appears in peril

Posted August. 10, 2000 13:43,   


As Korea Exchange Bank president Kim Kyung-Lim has demanded the retirement of chairman Chung Mong-Koo, Hyundai Motor is on the alert.

So far, Hyundai Motor executives had thought that their chairman was not a target of the government and creditors because he clearly declined the declaration by the Chung family, led by Hyundai founder Chung Ju-Yung.

Kim`s remarks have been interpreted to mean that the creditors will not accept Hyundai`s self-relief package or might withdraw loans from Hyundai Motor if chairman Chung does not retire from his current position. So it is rather natural that Hyundai Motor is on an alert.

However, some industrialists interpret his remarks in a different way. They say that Kim`s mention of Chung is intended to show that the pressure of the new economic team and creditors against Hyundai is not only aiming at companies controlled by chairman Chung Mong-Hun. It is a kind of gesture to show that the government and creditors will maintain a neutral position in the family feud between the two Chung brothers, they said.

Before last week¡¯s presidential cabinet reshuffle, aides of chairman Chung Mong-Hun complained that both the government and creditors were squeezing the chairman, noting that it is a result of Hyundai Motor`s full-swing lobbying. Also, business circles see it as building grounds to justify direct involvement in Hyundai Motor if any trouble occurs in line with the company`s insolvency, even if chairman Chung does not retire.

Overall, the government and Korea Exchange Bank have shown a positive response to Hyundai`s plan for pre-separation of the group affiliates, hinting that it could lead to solution of Hyundai`s trouble.

Still, it is too early to judge whether the Hyundai trouble will be resolved because the company has refused to accommodate the creditors` demand to sack the management of some insolvent subsidiaries, even if a spin-off of Hyundai Motor¡¯s affiliates is carried out as scheduled.