Jung Mong-Hun Quits the Financial Business

Hyundai Asan Chairman Jung Mong-Hun at last washes his hands of the financial business.

According to the Hyundai group yesterday, Chairman Chung decided to sell his shares (19.8 percent) of the Hyundai Securities Co. co-owned by himself and the Hyundai Merchant Marine Co. to the U.S.`s American International Group (AIG) Inc. Now the negotiation on the price is undergoing. Because the negotiation between both parties is likely to be completed within this week, the right of management will be transferred to the AIG, and thus Chairman Chung can no longer operate the financial business.

An official of the Financial Supervisory Commission (FSC) told that ``currently the Hyundai side and the AIG side are under negotiations on the sales price of the shares of the Hyundai Securities Co., and the result will come out soon``. Lee Keun-Young, the chairman of the FSC, recently reported the negotiation between the Hyundai and the AIG to the executive policy council of the National Assembly, which means that the takeover of the Hyundai Securities by the AIG became the established fact.

An official of the Hyundai suggested that the negotiation reached its final stage by saying that ``the sales of the Hyundai Investment Trust & Securities Co. will be concretized within the end of this month as the government hoped``.

Chairman Chung thus far wanted to maintain the right of management as the second largest stockholder, even if the Hyundai Securities Co. and the Hyundai Investment Trust & Securities Co. will be sold to the AIG.

But the Hyundai established the plan to sell completely out the Hyundai Securities Co..

It is because that Chairman Chung cannot receive the various approvals and permissions from the governmental offices due to the responsibility on the insolvency of the Hyundai Life Insurance Co. even though he remains as the second largest stockholder.

Hence, Chairman Chung is working on the reorganization of the group, raising the Hyundai Merchant Marine Co. as the core company and simultaneously concentrating on five companies such as the Hyundai Asan, the Hyundai Logistics Co., the Hyundai Elevator Co., and the Hyundai Corporation as its main forces.

A high-ranking official of the Hyundai group told that ``the group established the basic plan to operate only the profitable businesses focusing on 5 main companies. And it plans to select and to promote only the business divisions which can bear profits among its subsidiaries``.

daviskim@donga.com