Intangible value of HEC

There is mounting criticism as the question of Hyundai Engineering & Construction is making very slow progress and that the issue is not being handled under the market mechanism.

As for the call to treat Hyundai under market principles, we fully agree. However, reaction of the market is stemming from the angry feeling about incompetence of chairman Chung Mong-Hun and other Hyundai executives. Isn't it time to separate the management, which triggered the critical circumstances, from Hyundai Engineering & Construction that is considered as a great company?

If HEC is placed under court receivership, it would be impossible for the company to win domestic orders as well as overseas construction projects. The company constitutes nearly 60 percent of the nation's entire overseas construction orders. And there is no Korean company that can replace Hyundai, so Hyundai's court receivership would mean that Korea will be kicked out of the global construction market, which is estimated to be worth hundreds of billions of dollars.

Also, HEC is involved in 418 construction sites domestically and 115 overseas building projects in 33 countries. Particularly, the overseas sites hardly can be properly managed by the new manger of the company to be appointed under the court receivership.

Then, HEC would be liquidated. A company that has a value of several trillion won in terms of marketing and technological capability could be gone instantly. For this reason, placing HEC under court receivership would result in killing the company.

A company's value lies in its manpower and tacit knowledge that have been accumulated over a long period of time. It would be desirable to run the company by employing a professional and responsible manager.

We should not forget that restructuring is a tool designed to sharpen the competitive edge of the relevant industry.

Lee Byong-Ki eye@donga.com