Seoul rejects Hyundai's new restructuring plan

Seoul rejects Hyundai's new restructuring plan

SEOUL (AFP): South Korea's government has rejected a new
restructuring plan by the giant Hyundai Group, urging it to abide
by an earlier promise to spin off its automaking unit, officials
said Saturday.

The Fair Trade Commission (FTC) has turned down a request from
Hyundai for permission to retain Hyundai Motor Co. within the
group and split 25 non-auto affiliates from the group instead
under a newly drafted restructuring plan.

The Hyundai Group on Friday filed applications to realign the
sprawling empire with the FTC under the laws on fair trade.

It said the group founder, Chung Ju-Yung, would be the
controller of the remaining 11 auto-centered units while one of
his son, Chung Mong-Hun, would leave the group with 25 non-auto
units.

But the FTC rejected the plan as a ploy aimed at expelling
Chung's eldest son, Chung Mong-Ku, from the driver's seat of
Hyundai Motor and retaining the empire under two different names.

It noted that Chung Ju-Yung has appointed Chung Mong-Hun to
succeed him as the chairman of the group.

Chung Mong-Ku, who currently controls the Hyundai Motor Co.
and auto-related units, has been estranged from his father and
Chung Mong-Hun after he said he would leave the group with the
auto units.

"It would fit the legal concept of a group separation better
should the Hyundai Motor and its affiliates be spun off from the
Hyundai Group which is controlled by Chung Mong-Hun," the FTC
said in a statement.

FTC demanded Hyundai keep to the promise to creditor banks
that it would separate automobile subgroup by lowering Chung Ju-
Yung's share in Hyundai Motor from the current 9.1 percent to
below three percent.

The Hyundai Group has come under criticism from creditors and
economists as the feud among the father and the two sons delayed
the group's much-needed restructuring.