By Kim Jae-won
Orix Corp. is having difficulties closing the deal to buy a major stake in Hyundai Securities because the financial regulator is reluctant to give a green light to the Japanese conglomerate due to insufficient documents.
The Financial Services Commission (FSC) said Wednesday that it will not discuss the Hyundai situation until Orix presents an investment contract which it signed with Jabez Partners, the second-largest shareholder of the brokerage house.
Orix agreed earlier this year with Hyundai Merchant Marine (HMM) to buy its 22.4 percent stake in Hyundai Securities for 647 billion won in cooperation with Jabez, which owns a 9.5 percent stake in the nation's fifth-largest brokerage house.
"We are waiting for the contract because there are some changes in the list of Jabez's investors," said an FSC official. "We will examine the case after we receive full documents from Orix."
Industry sources said that Orix is at odds with Jabez over the contract as some investors withdrew their money from Jabez. The asset manager said it drew new investments from the Military Mutual Aid Association, but Orix said it has not received a letter of confirmation from the association.
Opposition from lawmakers about the deal are another concern of the Japanese company.
Rep. Kim Ki-sik of the New Politics Alliance for Democracy urged the Financial Supervisory Service to examine the deal thoroughly because HMM seeks to "park" the brokerage house in Orix.
HMM's investments in Orix also raises questions whether the flagship affiliate of Hyundai Group really wants to sell the securities firm.
HMM invested 120 billion won in a private equity fund set up by Orix. The shipping company also invested 80 billion won in Buffalo Finance, a special purpose company to buy Hyundai Securities.
Representatives from Orix were not available for comment.
Orix is a Tokyo-based company whose businesses range from finance to real estate. It is listed both on the Tokyo Stock Exchange and the New York Stock Exchange.
Hyundai Securities has suffered from prolonged conflicts between its trade union and the management for the last few years. The union accused Hyundai Group Chairwoman Hyun Jeong-eun of controlling the company with her close aide surnamed Hwang.
In January, former union leader Min Kyung-yoon was sentenced to six months in prison with two years of suspension for spreading false rumors about the firm. Min was fired by Hyundai in 2013 for inflicting losses to the company.
Orix Corp. is having difficulties closing the deal to buy a major stake in Hyundai Securities because the financial regulator is reluctant to give a green light to the Japanese conglomerate due to insufficient documents.
The Financial Services Commission (FSC) said Wednesday that it will not discuss the Hyundai situation until Orix presents an investment contract which it signed with Jabez Partners, the second-largest shareholder of the brokerage house.
Orix agreed earlier this year with Hyundai Merchant Marine (HMM) to buy its 22.4 percent stake in Hyundai Securities for 647 billion won in cooperation with Jabez, which owns a 9.5 percent stake in the nation's fifth-largest brokerage house.
"We are waiting for the contract because there are some changes in the list of Jabez's investors," said an FSC official. "We will examine the case after we receive full documents from Orix."
Industry sources said that Orix is at odds with Jabez over the contract as some investors withdrew their money from Jabez. The asset manager said it drew new investments from the Military Mutual Aid Association, but Orix said it has not received a letter of confirmation from the association.
Opposition from lawmakers about the deal are another concern of the Japanese company.
Rep. Kim Ki-sik of the New Politics Alliance for Democracy urged the Financial Supervisory Service to examine the deal thoroughly because HMM seeks to "park" the brokerage house in Orix.
HMM's investments in Orix also raises questions whether the flagship affiliate of Hyundai Group really wants to sell the securities firm.
HMM invested 120 billion won in a private equity fund set up by Orix. The shipping company also invested 80 billion won in Buffalo Finance, a special purpose company to buy Hyundai Securities.
Representatives from Orix were not available for comment.
Orix is a Tokyo-based company whose businesses range from finance to real estate. It is listed both on the Tokyo Stock Exchange and the New York Stock Exchange.
Hyundai Securities has suffered from prolonged conflicts between its trade union and the management for the last few years. The union accused Hyundai Group Chairwoman Hyun Jeong-eun of controlling the company with her close aide surnamed Hwang.
In January, former union leader Min Kyung-yoon was sentenced to six months in prison with two years of suspension for spreading false rumors about the firm. Min was fired by Hyundai in 2013 for inflicting losses to the company.
