Hyundai Motor chair to pay 82.6b won
- PUBLISHED :February 25, 2011 - 18:35
- UPDATED :February 25, 2011 - 18:35
The Seoul Central District Court on Friday ordered Hyundai Motor Group chairman Chung Mong-koo to pay 82.6 billion won ($73.1 million) in compensation to Hyundai Motor Co. for damages caused by irregular intra-group trading.
Aside from Chung, former Hyundai Motor vice chairman Kim Dong-jin has been ordered to pay 8 billion won in compensation to the carmaker.
The ruling follows three years after the antitrust regulator Fair Trade Commission slapped Hyundai Motor with a 50.7 billion won fine for exclusively placing orders with its affiliates and allowing its chairman Chung and his son to unfairly take control of the logistics affiliate Glovis. Glovis was established in 2001, and Chung and his son Eui-sun acquired 100 percent of the logistics firm’s shares at the time of its establishment, with the younger Chung taking 60 percent.
The suit, filed by 14 minority shareholders and the NGO Solidarity for Economic Reform, pushed for 1.09 trillion won compensations for damages caused by the two executives unfairly supporting affiliates and gains made by the two Chungs from Glovis shares.
The elder Chung and Kim were accused of directing more than a fair share of contracts to Hyundai Motor Group subsidiaries, and raising the price of parts produced by Hyundai Mobis.
In its ruling the court said the claim that Chung unfairly supported Hyundai Mobis Co. and Hyundai Glovis stands and that the two have the responsibility of making reparations.
The court, however, ruled against the plaintiffs over the claim concerning Glovis shares saying that the action can’t be seen as having been detrimental to the carmaker.
By Choi He-suk (firstname.lastname@example.org)