Court favors Schindler Group over Hyundai Group

Hyundai Group Chairwoman Hyun Jeong-eun enters late former Hyundai Chairman Chung Ju-young's house in central Seoul for Chung's memorial service on March 20. [NEWS1]

A court ruled in favor of the Schindler Group and ordered Hyundai Group Chairwoman Hyun Jeong-eun to compensate Hyundai Elevator.

The Seoul High Court on Thursday upheld a lower court’s ruling and ordered Hyun to pay the Swiss-based elevator manufacturer 170 billion won ($130 million).

Former Hyundai Elevator CEO Han Sang-ho is to pay 19 billion of the 170 billion won.

The nine-year-long dispute began when Schindler Group, the second largest shareholder of Hyundai Elevator, filed a suit against Hyundai’s chairwoman for causing some 700 billion won in financial damages to Hyundai Elevator with unfair derivative contracts.

Schindler Group claimed Hyundai Group had Hyundai Elevator make unfavorable deals with Hyundai Merchant Marine to maintain control of the shipping company, which was a target of a hostile takeover then.

The Swiss multinational company demanded Hyundai Elevator’s audit committee to claim damages in 2014. Schindler Group filed a shareholder derivative suit when the committee did not reply.

The first court ruled in favor of the defendant, saying that Chairwoman Hyun took a valid business action in making the derivative contracts. The appellate court overruled the decision.

BY SOHN DONG-JOO [sohn.dongjoo@joongang.co.kr]