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| Chung Ki-sun |
By Park Jae-hyuk
Daunting tasks have been assigned to Hyundai Heavy Industries (HHI) Holdings and Korea Shipbuilding & Offshore Engineering (KSOE) President Chung Ki-sun, as the late founder's grandson stepped closer to tightening his control over the shipbuilding group, Tuesday, a day before the 50th anniversary of its founding.
According to KSOE, Chung was appointed as its new co-CEO to lead the company along with Vice Chairman Ka Sam-hyun, during Tuesday's board of directors meeting, which was held immediately after the general meeting of shareholders, where his proposed appointment as a new inside director was passed.
He is also expected to be appointed as a new inside director of HHI Holdings without a major hitch, during next Monday's general meeting of shareholders of the group's holding company, which will be rebranded as HD Hyundai.
His entry to the boards of HHI Holdings and KSOE has been widely viewed as a preparatory measure to hand over control of the group to him from professional managers, who have run the group, since Chung's father, Asan Foundation Chairman Chung Mong-joon, the largest shareholder of HHI Holdings, with a 26.6-percent stake, stepped down from management in 2002.
Considering the fact that the younger Chung said at the CES 2022 in January that HHI Group will grow into a "future builder" creating new values for humankind, he seems to be focusing for a while on attracting investments for autonomous ships, eco-friendly vessels and a hydrogen value chain, as well as increasing his stake in the group's holding company and its affiliates.
"Chung will be able to push ahead with various new businesses, capitalizing on the recent growth in the shipbuilding industry," an industry official said.
The 39-year-old, however, is still facing conflicts with minority shareholders and unionized workers.
KSOE's minority shareholders have complained about the company's ongoing attempt to list one of its subsidiaries, Hyundai Samho Heavy Industries, on the local stock market.
They have expressed concerns about an additional decline in the parent firm's stock price, citing its previous stock price plunge, when another subsidiary, HHI, was listed on the benchmark KOSPI market last September.
Some of them even voted against Chung's appointment as an inside director to protest the company.
In response, KSOE's management announced several shareholder return policies at Tuesday's general meeting, saying it is considering raising dividends, repurchasing treasury stocks and retiring the stocks.
"We are also considering delaying the subsidiary's initial public offering (IPO) until the introduction of specific regulations on listing a listed holding company's subsidiary," a KSOE official said. "If we pursue its IPO before the introduction of the regulations, we will consider measures to protect shareholder value."
On the same day, unionized workers of HHI, Hyundai Construction Equipment and Hyundai Electric rejected the tentatively proposed agreement on 2021 wages.
During a vote taken on Tuesday morning, 68.5 percent of voters refused to accept the proposal.
"The lower-than-expected base salary and the hefty dividends paid to the HHI's largest shareholder have angered the workers," an HHI union representative said.
The management claims that it has tried its best to satisfy the unionized workers for a prosperous relationship with them during the year of the 50th anniversary of its founding.
