EDITORIAL; Critical Feud within Hyundai Group
Economy-minded people at large remain concerned about the Hyundai business group's inner feuding over the management rights of major enterprises of the nation's largest industrial conglomerate among three sons of Hyundai founder and honorary chairman Chung Ju-yung, each being aided by warring vassals of CEOs and other key company executives.
It is widely observed that the feuds over the managerial rights of the group's component firms are attributable largely to the apparent weakening of the owner's decision-making power and fading influence due to poor health and advanced age. The conflict, which is said to be a kind of ``war of princes,'' is almost certain to have accelerated as a result of the division of loyalty toward the three brothers among the group's leading executives.
The feuding has led to a row over Hyundai Motor's separation from the group and Hyundai Construction and Engineering's liquidity crisis following the lowering of the credit ratings of eight affiliates of the group. The financial crisis of the country's largest construction firm has barely been overcome by its creditor banks' special action that deferred the maturing period of their loans to the trouble-stricken company.
However, without the firm's self-help efforts, the company's and other Hyundai affiliates' latent and potential business crisis is feared to inflict grave damage to not only the Hyundai group but the nation's entire economy. In this context, the precarious Hyundai crisis may recur to remain a major problem of the national economy throughout the latter half of this year.
The Hyundai conflict appears to have developed mainly between elder son Mong-koo, now chairman of Hyundai Motor, and one of his young brothers, Mong-hun, who has been handpicked as chairman of the group's larger sectors, including foreign trade and electronics.
Notably, this week Hyundai Heavy Industries, which runs a large-scale shipyard in Ulsan, with younger brother Rep. Chung Mong-joon, who has the largest portion of equity shares in the company among the family members, came to lodge a lawsuit demanding that Hyundai Electronics, under the management of Mong-hun, one of his elder brothers, repay $220 million that was first paid by the heavy industry firm to a Canada-based bank called CIBC.
The maverick, who was elected to the National Assembly four straight times by a parliamentary constituency in Ulsan, where Hyundai's mammoth shipyard and motor plant are based, remains chairman of the Korean Soccer Association and also vice chairman of the international soccer federation FIFA. …