Hyundai Securities Gets Nod to Defer Payment

An appellate court has ruled that Hyundai Securities does not have to immediately repay the second half of debt it owes to a creditor, the Korea Securities Dealers Association said Monday.

Samyang Oil and Feed Corp. asked the court to force Hyundai to repay the full amount of the debt. Hyundai redeemed just 50 percent of it, in accord with a Financial Supervisory Service ruling.

Hyundai is not bound to pay back 100 percent of the investment because the Financial Supervisory Service approved a redemption delay, the court said in its ruling. The financial regulator's decision was based on clauses in the contracts Hyundai uses.

Samyang bought 5.46 billion won ($4.2 million) worth of short-term money market funds issued by CJ Investment Trust Management Co. from Hyundai. The investment funds contained bonds of Daewoo Group. After Daewoo sank into a crisis, Samyang asked Hyundai in August 1999 to redeem the total investment. Hyundai repaid half the original amount, justifying the move with its contracts and the regulator's plan on investment funds, which let sellers of such funds to redeem only 50 percent in a three-month period to prevent overdrawing.

by Lee Hee-sung