Hyundai CEO Faces Damage Suit
By Park Hyong-ki
Staff Reporter
The state-run Korea Deposit Insurance Corporation (KDIC) said Monday it plans to file a suit next month against executives of Hyundai Group's former affiliates, including incumbent Chairwoman Hyun Jeong-eun, for financial damage caused to their creditors.
``The deposit insurer will file damages against eight former executives of Hyundai Engineering & Construction (HEC) for obtaining illegal loans from seven lenders, including Chohung Bank (now, Shinhan Bank), based on falsified balance sheets in 1998,'' KDIC announced. ``Their failure to pay back the loans caused losses worth 27.6 billion won.''
The insurer will also seek compensation from four former executives of Hynix Semiconductor for the same reasons as HEC. The chipmaker acquired illegal loans from Korea First Bank (now, SC First Bank) in 1999, and caused 1.5 billion won in losses from a failure to repay loans.
Creditors, including Shinhan Bank and SC First Bank, had been asked by the KDIC to file lawsuits against former Hyundai units by June 15, but they failed to do so citing fears of losing business with the conglomerate.
``Henceforth, we will step in and take matters into our own hands to retrieve public money should financial firms refuse to file lawsuits against such companies with debt liabilities,'' said the KDIC. It added that it will continue to question executives involved in illegal lending and hold them responsible.
Hyun, the widow of late-Chairman Chung Mong-hun, is held accountable for such damages to the banks whose bad debts had been bought by KDIC by using taxpayers' money, as she inherited the group and became the owner, the deposit insurer said.
Hyundai Group, in the meantime, said the chairwoman is not responsible as she wasn't involved in top management then, and since those units had been separated from the group, it believes a court of law will not totally obligate her to offer compensation for the losses.
``We hope it can take into consideration that the group is doing all it can to pay back the late-Chung's debts,'' said an official of the group.