[Reporter`s Opinion] Give it Up to Survive….

Jung Mong-Hun, chairperson of the Hyundai Asan Board of Committee, has twice broke-out in tears.

The first time was at the funeral ceremony of his father, the late founder of Hyundai Group Jung Ju-Yung and the second time was when the government and creditor banks decided for the debt-equity swap of Hyundai Engineering and Construction. Both were tears of bitter grief.

However, tears of Mr. Jung is yet to see the end.

The negotiation for the sales of Hyundai Investment Trust & Security Co., Ltd. had been going well until Mr. Jung suddenly began to insist that he would not sell his share of Hyundai Investment Trust & Security Co., Ltd. Coincidently, anxiety of the creditors that Hyundai might have to suffer another liquidity crisis emerged at the time.

A high official of Financial Supervisory Commission remarked, ``Chairman Jung promised to give up finance business, taking responsibility for the ill management of Hyundai Investment Trust & Security Co. Ltd., which was already at the state of impaired capital.

It would be fortunate if this change of his position comes from the recovery of his confidence. However, the current situation of Hyundai seems far from it. Jung’s decision looks more like a stubborn persistence to keep his vested rights.

Hyundai Merchant Marine Co. Ltd. currently functions as a holding company of Hyundai Group. The largest stockholder of Hyundai Merchant Marine Co. Ltd. is Hyundai Elevator. And controlling shareholder of Hyundai Elevator is the mother-in-law of Mr. Jung. And therefore, Hyundai Elevator controls Hyundai Merchant Marine Co. Ltd. and the Hyundai Merchant Marine Co. Ltd. now controls the rest of Hyundai Group companies. This appearance indicates not suitable to the old mammoth group Hyundai, which had taken the lead of Korean economy.

The Hyundai problem was indicated as a stumbling block for the Korean economy at the meeting of the government, the ruling and opposition parties, two days before. It was pointed out at this meeting that the stubborn attachment of Mr. Jung to his vested rights makes the situation worse.

The resolution of the problem is in the lesson: Give it up to survive, which has been proven true by the examples of other companies that succeeded in their restructuring.

daviskim@donga.com