Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Hyundai Motor tightening grip on Hyundai Capital
Hyundai Card's headquarters in Seoul. Courtesy of Hyundai Card
By Park Jae-hyuk
By Park Jae-hyuk
Hyundai Motor Group is speeding up the process of separating Hyundai Capital from Hyundai Card and Hyundai Commercial, raising speculation that Chairman Chung Euisun will strengthen his control over the auto-financing company, which was previously managed by his brother-in-law, Hyundai Card and Hyundai Commercial Vice Chairman Chung Tae-young.
Last Friday, Hyundai Card and Hyundai Commercial announced that Hyundai Capital's press releases will no longer be uploaded on the former's online public relations (PR) platform. Hyundai Capital's logo was also removed from their websites.
“Hyundai Capital's PR team was split off from our team, so Hyundai Capital employees, who previously handled issues regarding Hyundai Card and Hyundai Commercial, will only deal with issues related to Hyundai Capital,” a Hyundai Card spokesperson said.
The comments indicated that the latest governance overhaul of Hyundai Motor Group's three financial arms has also affected their rank-and-file employees.
Hyundai Capital's regulatory filing has already shown that its 29 executives, who were concurrently holding positions at Hyundai Card and Hyundai Commercial, resigned Oct. 12 to work only for the credit card issuer and the corporate financing firm.
Regardless of their remaining terms as Hyundai Capital executives, those who were in charge of business management, digitization, brand awareness, personnel affairs and PR left the company.
Their resignations came about a month after the Hyundai Card vice chairman and his wife, Hyundai Commercial President Chung Myung-yi, stepped down from their posts at Hyundai Capital, Sept. 30.
“We do not have any plan to hire new executives, as we will maintain our existing executives,” Hyundai Capital said in a regulatory filing.
Hyundai Capital is expected to gradually increase the number of executives from Hyundai Motor Group's key subsidiaries, including Hyundai Motor Company, for the chairman to tighten his grip over the financial firm.
The appointment of Hyundai Glovis managing director Yoo Heung-mok as a Hyundai Capital executive, Oct. 18, supports this speculation.
He built most of his career at Hyundai Motor Company. In addition, Hyundai Glovis has been viewed as one of the most important subsidiaries for the Hyundai Motor Group chairman, who is the logistics company's largest shareholder with a 23.3 percent stake.
While the Hyundai Motor Group chairman is strengthening his control over Hyundai Capital, the Hyundai Card vice chairman seems to be focusing more on the credit card firm.
The vice chairman and his wife together hold a 37.5 percent stake in Hyundai Commercial and the corporate financing firm increased its stake in Hyundai Card to 28.5 percent in August by acquiring a 4 percent stake from special purpose entities owned by Affinity Equity Partners.
Taiwan's Fubon Financial, which has maintained a close relationship with the Hyundai Card vice chairman, also took over a 20 percent stake from Affinity at that time.
Hyundai Card, however, has denied the rumors about its spin-off from Hyundai Motor Group, citing Hyundai Motor Company and Kia hold 36.9 percent and 11.5 percent stakes in the credit card firm, respectively. Hyundai Motor Company also holds a 37.5 percent stake in Hyundai Commercial.