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Audit into Hyundai builder’s takeover price mulled

Posted December. 03, 2010 11:14,   


Financial authorities have hinted at probing the takeover funds for Hyundai Engineering & Construction amid the row between the builder’s creditors and Hyundai Group.

Hyundai-Kia Automotive Group withdrew deposits from its key creditor, Korea Exchange Bank, and moved the payroll accounts of its employees to other banks to pressure Korea Exchange.

A financial regulatory source said Thursday, “We received no request for an investigation into the takeover price for Hyundai (Construction) but if one part requires confirmation, the supervisory body can do that within a permissible scope.”

The source said creditors and Hyundai Group should try to resolve the row themselves as much as possible, but said the government could accept creditors’ request to stabilize the financial market and protect investors.

This makes an audit likely on the disputed source of money Hyundai Group expects to use in the acquisition -- 800 billion won (694 million U.S. dollars) invested by Tong Yang Investment Bank and 1.2 trillion won (1 billion dollars) by Hyundai Merchant Marine through a loan from the French bank Natixis.

Korea Exchange, Korea Finance Corp. and Woori Bank will soon hold a meeting of their creditors’ management committee on whether to request an audit into the takeover price.

Korea Exchange sent an official letter urging Hyundai Group to sign an agreement on improving its financial structure by Monday. The conglomerate in May was selected an entity for the agreement on improving financial structure but refuses to sign the deal, which limits new financing before the takeover of the builder.

weappon@donga.com nuk@donga.com