April 20, 2024

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[THE INVESTOR] Switzerland-based Schindler Elevator has sent a notice of intent seeking an investor-state dispute suit against the Korean government, claiming losses from Hyundai Elevator’s recapitalization procedure, the Justice Ministry said on July 26.

In a notice sent on July 11, Schindler, the No. 2 shareholder with a 15.9 percent stake in Hyundai Group’s moving solutions affiliate, alleged the government’s approval for the Korean company’s public offering schemes undermined the corporate value, and that it is seeking compensation of at least 292.8 billion won (US$259 million), the ministry said. 

Schindler Elevator

The Swiss firm has claimed Hyundai Elevator’s issuance of new shares from 2013 to 2015 was intended to strengthen the grip of Hyundai Group Chairwoman Hyun Jeong-eun at the expense of shareholders. It also opposed the money-losing derivative arrangement with Hyundai Elevator‘s unprofitable shipping affiliate, Hyundai Merchant Marine, in 2014.

The Financial Supervisory Service, a state financial regulator, approved the rights offerings during the cited period.

“The Korean government and Schindler agreed to proceed with the arbitration procedure to smoothly resolve the issue,” the ministry said in a release.

A notice of arbitration by the Swiss firm is a preliminary procedure before filing a formal suit. If the matter is not resolved through settlement within 90 days, the plaintiff can bring the claim directly to the international tribunal under the ISD procedure.

By Song Seung-hyun and newswires (ssh@heraldcorp.com)