Gov't, Hyundai at odds over solution to crisis

The Hyundai Group crisis, which once showed signs of being resolved, remains as dire as ever due to the sharp differences between financial authorities and the group itself over how to solve it.

The government has come up with a tough policy, saying that it will place Hyundai Engineering and Construction under a workout program or court receivership unless Hyundai makes a bold decision that the market can accept.

Industrial and financial sources are worried that the issue could have serious repercussions for the economy, depending on progress in dealing with the volatile Hyundai situation.

According to financial authorities and industrial sources, Hyundai Group had planned to confirm its self-rescue plans by the weekend and announce them Sunday, but failed to do so. Former chairman Chung Moo-Hun has not yet returned home from his overseas trip. Rumor had it that he would return over the weekend.

A Hyundai executive said the government and the group have neared an agreement on a spinoff program for the group`s motor unit, but maintain quite different positions on HEI`s selling of its Hyundai Merchant Marine shares (23.86 percent) and the withdrawal of incumbent executives close to the Chung family. He said that HEI can sell in due sequence its stocks in Hyundai Heavy Industries, Koryo Industrial Development, Hyundai Pipe and Hyundai Oil Refinery, but added that it was difficult to accept the sale of Merchant Marine shares.

Hyundai Group feels that calling for the sale of HEI`s Hyundai Merchant Marine shares are virtually tantamount to demanding that the conglomerate itself dissolve.

Hyundai also maintains that it may examine the withdrawal of executives close to the Chung family after the current crisis is brought under control, but the government is demanding immediate, tangible steps.

A high-ranking official of the Financial Supervisory Commission said that the government has already designed a workout program for HEI. Unless Hyundai accepts the demands of the government and creditors, HEI has no choice but to enter a workout program followed by stringent self-rescue plans and disciplinary measures for its managing executives, he said.