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Friday, September 17, 2004

(Korean family) The rise of Chung the son in Hyundai Motor

Those affiliate companies of Hyundai Motor, in which the only son of the Hyundai Motor chairman Chung Mong-koo (정몽구 鄭夢九) is a large shareholder, have been growing quickly, notes Hankyoreh. Chung's son is the vice president (pusajang) of Kia Motors, which belongs to the Hyundai Motor group. For example Amco (엠코), construction company founded as lately as 2002 has been this far building only for Huyndai, but is now finishing an apartment block in Incheon, and is expected to grow further, and there's also talk about it ending up taking over Hyundai Construction (E-daily article). Chung the son owns 60% of Glovis, which owns 60% of Amco. Looking at the article, Amco is a prime example of a company made fat by intra-group transactions, in this case by construction deals. Glovis, originally founded as a transportation company in 2001 has grown similarly ever since. It makes 90% of it transactions within Hyundai Motors.
An unnamed person from stock exchange circles notes that transferring assets to companies in Chun the son's ownership is likely a one step in the transfer of ownership and managerial power, but Hyundai Motor tells that all these affiliate companies are needed for business:
이 세 계열사의 성장과 수익 증가는 배당금 확대와 주식가치 상승을 통해 정 부사장의 재산 증식으로 이어지게 된다. 한 증권업계 관계자는 “그룹 차원의 밀어주기를 통해 회사를 키워줌으로써 정 부사장의 상속세 마련을 위한 재산 증식에 도움을 주고자 하는 것 아니겠냐”고 해석했다. 이에 대해 현대차그룹 관계자는 “공장 건설은 회사기밀상 외부에 맡길 수 없어 엠코를 건설했으며, 물류사업이 복잡해지면서 하청업체들을 관리하기 위해 글로비스를 만들었다”며, “최근 몇년 사이 현대차가 호황이었기 때문에 이익이 난 것이지, 불황이면 손해를 감수해야 한다”고 주장했다.
So anyway, it's a bit early to expect business to be just business for the affiliate companies of Korean conglomerates, and to expect capitalist principles interfere too much with the family interests.

(By the way Chung the son is a mere pusajang, while Mr Pak, second from right in the header picture working in his pangakan, is sajang. I'm sure he'd know how to crack a good joke about this...)

How moving that someone from Canada should google for Sillim-dong pictures. Dear googler, you've come to the right place! And I would've been upset and disappointed if my site hadn't come first in the search...

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