Hyundai Heavy Files Damages Suit against Hyundai Electronics
Hyundai Heavy Industries yesterday filed a suit against Hyundai Electronics Industries, seeking to have its affiliate return $220 million Hyundai Heavy paid to a Canadian lender on its behalf.
In a statement, Hyundai Heavy said that the suit is aimed at having Hyundai Industries return the money but also to cover any damages incurred in the process.
``The board of directors decided to file the suit against Hyundai Electronics and Hyundai Securities, and their heads,'' a Hyundai Heavy spokesman said. The suit was filed at the Seoul District Court yesterday afternoon.
Hyundai Heavy said that the board had five meetings, the fifth on July 28, to consider whether to file a suit or not, before concluding that the $220 million paid on Hyundai Electronics' behalf couldn't be written off as losses.
``Our action, regrettable as it is, is part of our determination to bring transparency to management and increase confidence in the markets,'' the statement said.
The first inter-Hyundai affiliate legal action follows days of threats and counterthreats between the pertinent firms after Hyundai Heavy disclosed that it paid the Canadian Imperial Bank of Commerce (CIBC) $220 million on July 20.
Hyundai Heavy and Hyundai Electronics agree that Hyundai Electronics received $175 million from the CIBC in return for 13 million shares of its affiliate, Hyundai Investment and Trust in July, 1997.
Hyundai Heavy, however, claims that it provided a written promise to buy back the stocks from the Canadian lender in the event that Hyundai Electronics failed to do so on a putback option on July 20, this year, three years after the deal. …