The Korea Exchange Bank (KEB) has sequestered some 545 million won in an account belonging to the union of Hyundai Motor.
The move came after a ruling by the Supreme Court in favor of Hyundai Motor’s main creditor bank in its legal effort to retrieve the sum over a loan given to a subcontractor who provided gifts to Hyundai Motor union members during its foundation party in 2006.
“It was not a forceful withdrawal but a step taken according to a legal procedures,” a bank spokesman said.
KEB took legal action after the subcontractor failed to repay a loan, and the highest court ruled in favor of the bank in June.
“We just followed the procedures by taking the relevant sum from the union’s account, which was signed as guarantor in case of default,” the KEB official said, adding the bank was led by Richard Wacker at the time and it was not clear whether the former head knew about the deal.
The union, in turn, has decided to sue Park Yoo-gi, its then-union leader who now heads the nation’s metal workers union.
It is reported Park knew the subcontractor was not capable of fulfilling an order but nonetheless provided repayment guarantees.
The case has taken a further twist as one of the union’s leaders received a prison term while Park resigned.
Hyundai Motor’s union has selected its leader, who is more conciliatory toward management, triggering some to expect that one of the most hardline unions is undergoing a transformation at a time when Korea’s militant labor movement is being weakened after a series of defections by unions of big conglomerates.