Hyundai Motor Group and Hyundai Group agreed Thursday to end all legal disputes stemming from the purchase of a local construction company by the carmaker earlier in the year.
The conglomerates said they decided to end the legal battle and withdraw complaints lodged with local courts that began when the country's largest automaker became the new owner of Hyundai Engineering and Construction Co. (Hyundai E&C).
Initially, Hyundai Group, which had controlled the construction firm before it was turned over to banks in a debt for equity swap in 2001, was picked as the prospective buyer, but lost its rights after Hyundai Motor's raised doubts about the conglomerate's ability to come up with the necessary 4.96 trillion won ($4.30 billion) to pay creditors.
Both conglomerates were founded by Chung Ju-young, who created the Hyundai business empire, with the carmaker currently managed by Chung's eldest living son. Chung's daughter-in-law, Hyun Jeong-eun, runs Hyundai Group after her husband and the company's previous CEO committed suicide in 2003.
Hyundai Group, a shipping and inter-Korean travel conglomerate, said it is dropping the charges of spreading lies and defamation against senior executives at Hyundai Motor.
In response, the carmaking conglomerate said it will also end countersuits for slander against two Hyundai Group affiliates.
Related to the latest thawing of relations between the two business groups, industry sources speculated that some sort of understanding may have been reached on how to deal with the 7.71 percent stake in Hyundai Merchant Marines held by Hyundai E&C, and now under the control of Hyundai Motor Group.
Control of the shipping company's shares are crucial for controlling Hyundai Group as a whole due to its complicated cross-ownership structure.
Despite such speculation, sources at the carmaker said there was no prior arrangement on the issue.
"Ending the legal actions are separate from how best to settle the stock holding issue," said an executive, who declined to be identified. (Yonhap)