Chung Family at It AgainIn a fitting arrangement, Hyundai Honorary Chairman Chung Ju-yung occupies the 15th floor of the group’s headquarters in downtown Seoul, while his sons, Hyundai Motors Chairman Chung Mong-koo and Hyundai Chairman Chung Mong-hun, have their offices on the 14th and 12th floors respectively (there is no 13th floor).
Other occupants are fearful of another sibling rivalry following Honorary Chairman Chung’s announcement on May 31 that he would resign, along with his two sons - the two embarrassed the group in March with a very public fight over who would assume chairmanship of the group.
In a surprising turn of events, the board at Hyundai Motors held a meeting on June 1 and reappointed Chung Mong-koo to his post, despite his father’s earlier statements. Meanwhile, Chung Mong-hun was holding a press conference to announce his plans to resign in accordance with his father’s wishes. Worries are mounting at the company and in domestic business circles as the the family drama rolls toward another climax.
The family squabble comes after a liquidity crisis at the company that forced the group to shed three core subsidiaries, highlighting the Korean government’s urgency in pushing for reforms from the dinosaurs of the Korean economy--the Chaebol. The fact that the Chung family is still a majority shareholder in Hyundai is another thorn in the side of reformers.
It may be premature to applaud Hyundai’s self-help package - the group is yet to name the managers who will replace the departing Chungs and has failed to come up with responsible policies that will do more than just draw attention away from the eyesore that Hyundai is fast becoming.
The Hyundai crisis is affecting corporations with limited means, who are struggling under financial deadlock awaiting the group’s recovery, while other conglomerates are pulling out of prospective investments in a bid to secure themselves from possible fall-out.
The Hyundai Group’s recently constructed sculpture that commemorates the beginning of a new millennium for the company could fast become a joke if the conglomerate fails to settle this issue in a hurry.
by Kim Si-rae