Chung Mong-koo to relinquish control of Hyundai Motor Group

Hyundai Motor Group Chairman Chung Euisun, left, Honorary Chairman Chung Mong-koo / Yonhap

By Nam Hyun-woo

Hyundai Motor Group Honorary Chairman Chung Mong-koo will vacate his board membership at Hyundai Mobis, loosening his control over the management of Hyundai Motor Group companies.

According to industry officials, Sunday, Chung won't be renamed as an internal director on the Hyundai Mobis board of directors during the component maker's annual general meeting slated for March 24.

Chung's current term expires in March, and the honorary chairman has already passed over the majority of Hyundai Motor Group companies' managing rights to his son, Hyundai Motor Group Chairman Chung Euisun.

When Chung Mong-koo ends his term, the 82-year-old will no longer hold board memberships at Hyundai Motor Group, meaning he won't be involved in managing the auto giant in the future.

In February last year, the Hyundai Motor board did not put giving Chung another term on its agenda, and replaced its board chairman with Chung Euisun. Since then, the senior Chung had remained as Hyundai Motor Group Chairman and CEO of Hyundai Mobis. In October, when his son became the chairman, he resigned as Hyundai Mobis CEO and stayed on as a non-standing member of its board.

He dropped his board membership at Hyundai Steel in 2014 and Hyundai Engineering & Construction in 2018.

When the honorary chairman leaves the Hyundai Mobis board, the company is expected to name an R&D vice president as his successor. This will be the first time the company naming a vice president as an inside board member.

Hyundai Motor Group is expected to launch a program to overhaul its cross-shareholding structure between affiliates "soon" in order to protect its governance from hostile activist funds and enhance Chairman Chung Euisun's control.

Industry officials anticipate the specifics of the upcoming overhaul are set to be announced sometime this year, because a new regulation on unfair trading between affiliates will compel the Chung family members to lower their stakes in logistics unit Hyundai Glovis from 29.9 percent to 20 percent from 2022.

Revenue from sale of the 9.9 percent is projected to be used to increase Chairman Chung's stake in Hyundai Mobis and Hyundai Motor, given their importance in the governing structure of Hyundai Motor Group. Chung has a 0.32 percent stake in Hyundai Mobis and a 2.62 percent stake in Hyundai Motor.

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