Hyundai Motor and Hyosung take administrative step for leadership change

Chung Mong-koo and Chung Euisun

South Korea’s second largest conglomerate Hyundai Motor Group and mid-tier Hyosung Group requested the country’s corporate watchdog to change their group representatives to third-generation leaders.

The auto giant asked the Fair Trade Commission (FTC) to change the group’s actual head responsible for entire management process from honorary chairman Chung Mong-koo to son and group chairman Chung Euisun, according to sources from the government and business circle on Monday.

The corporate watchdog releases list of business groups with assets of more than 5 trillion won ($4.45 billion) that will face stricter disclosure rules and groups with more than 10 trillion won assets subject to tougher cross-shareholding restrictions every May, and states their practical leaders in charge of overall management.

As younger Chung officially took the helm of the nation’s top auto-making group as chairman last October, observers believe he will replace his father as an actual leader of the group this time.

Elder Chung is set to step down from the board of Hyundai Mobis Co. at a shareholders meeting to be held this month to leave full management up to his son.

Cho Seok-rae and Cho Hyun-joon

The country’s textile and chemical conglomerate Hyosung made the same request to the FTC to change its actual head from its honorary chairman Cho Seok-rae to his son and group chairman Cho Hyun-joon over elder Cho’s health issues, according to sources.

The group also handed in documents to give some of the 9.43 percent stake with voting rights held by father Cho to his son.

As of September last year, chairman Cho owned a 21.94 percent stake in the group’s holding entity and his younger brother and vice chairman Cho Hyun-sang 21.42 percent.

The 85-year-old honorary chairman was sentenced to three years in prison for tax evasion in his second trial but was not imprisoned due to the bad health and old age.

Hyosung said Chairman Cho who has been in charge of overall management since his inauguration in 2017 should be named actual leader of the group.

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