BREAK UP OF HYUNDAI AND ITS DIVISION AMONG CHUNG JU YUNG’S SONS

CHUNG JU YUNG’S CHILDREN

Chung Ju Yung, the founder of Hyundai, had eight sons and three daughters. The oldest son, Chung Mong Pil, who would have been the undisputed leader, was killed in automobile accident in 1982. Another son, Chung Mong Woo, who suffered from depression, committed suicide in 1990. Chung Mong-hun was the former chairman of the Hyundai Group and heir apparent to his father. He committed suicide in August 2003. Chung’s first four children were offspring of his marriage to Byun Joong Suk, the daughter of a farmer from a hamlet near Chung’s home in North Korea. The others had different mothers. In accordance with traditional Korean custom, five of these were registered to have been born from Chung’s wife.

Chung Ju Yung’s brothers: 1) Chung Mong-pil (1934-1982) died in a car accident in Gimcheon, in a Hyundai-built Ford Granada, on the Gyeongbu Expressway leaving two daughters and no sons. 2) Chung Mong-koo (1938-) is the head of the Hyundai Kia Automotive Group, the second largest business group in Korea. 3) Chung Mong-kun (1942-) is the chairman of the Hyundai Department Store Group, one of the largest retailers in South Korea. 4) Chung Kyung-hee (1944-) is the only daughter of Chung ju-yung and Byeon Joong-seok. 5) Chung Mong-woo (1945-1990) committed suicide leaving three sons. His oldest son Chung Il-sun is currently the president of BNG Steel, a member of the Hyundai Kia Automotive Group. 6) Chung Mong-hun (1948-2003) was the former chairman of the Hyundai Group and heir apparent to his father. He committed suicide, leaving his wife Hyun Chung-eun (1956-) in control of the Hyundai Group.7) Chung Mong-joon (1951-) is a politician and de facto owner of Hyundai Heavy Industries, the world's largest shipbuilding firm, as well as vice-chairman of FIFA. 8) Chung Mong-yoon (1955-) is Chairman of Hyundai Marine & Fire Insurance, Korea's third largest non-life insurer. 9) Chung Mong-il (1959-) is the former chairman of Hyundai Merchant Bank and Kangwon Bank. 10) Chung Chung In (Grace Jeong) (1979-) is an actress. Chung Chung Im (Elizabeth Jeong) (1981-) is in advertising.

Break Up of Hyundai and Its Division Among Chung Ju Yung’s Sons

Chung Ju Yung divided Hyundai among his six surviving sons. Before his death in 2001, Chung divided his holdings, making Hyundai Motor and affiliate Kia Motors as an independent chaebol. Hyundai Motor Co became a publicly traded company. Hyundai Motor Co, Hyundai Heavy Industries Co., the Hyundai Group and other divisions operated independently after the Hyundai Group was restructured after the 1997-1998 Asian Financial Crisis. The problems and debts incurred by Hyundai Engineering & Construction accelerated the break up of Hyundai and set of an internecine war between the Chung brothers for control of it parts.

The eldest living son, Chung Mong Koo, thought he would be given control of the entire chaebol but he was passed by senior Chung in favor of Chung Mong-hun, the favored fifth son. In 2000, Chung Mong Koo broke away and took over Hyundai Motors. On its own Hyundai Motors ranked as the 5th largest company in South Korea.

Chung’s third son Chung Mong Joon took over Hyundai Heavy Industries, the shipbuilding branch, which was forced to break off from Hyundai and part of a reform effort. Chung Mong Joon is head of the Korean Football Federation and a vice president at FIFA. He was involved in bringing the World Cup to South Korea and ran for president in 2002.

Chung Mong-hun the favored fifth son, took over what was left of Hyundai, under Hyundai Engineering and Construction, mostly indebted or only slightly profitable subsidiaries. Hyundai Engineering and Construction and Hyundai Electrics (which changed its name to Hynix Semiconductor) were taken over by non-Chung family members.

Chung Mong-hun was heavily involved in Hyundai’s North Korean activities and got into trouble over payments made to North Korea on the eve of the meeting between Kim Jong Il and Kim Dae Jung . After he lost control of Hyundai Engineering and Construction, the only thing he was in charge of was Hyundai’s money-losing tourism enterprise. In August 2003, he jumped of to his death from a window on the 12th floor of the Hyundai headquarters in Seoul.

Lim Ung Ki, a business professor at Yonsei University in Seoul, told the New York Times that despite the bitterness among the brothers ''as the next generation takes charge, there can be collusion between companies within groups.'' But a member of the restructuring team at group headquarters said that ''disaffiliation'' was the inevitable.''There is no Hyundai Group anymore.'' [Source: Don Kirk, New York Times April 26, 2001]

Chung Ju Yung’s Plan to Break Up of Hyundai Among His Sons

Before his death in 2001, Chung divided his holdings, making Hyundai Motor and affiliate Kia Motors as an independent chaebol. Don Kirk wrote in the New York Times: Each son got at least one company; if he impressed his father sufficiently, he might gain two, three or even more. It was all part of the plan of Chung Ju Yung, the oldest of five brothers, father of eight sons, head of more than 80 companies, employer of 170,000, multibillionaire, master builder and ruler of an industrial empire spanning the globe. ''My father decides,'' one of the sons, Chung Mong Joon, once remarked when asked how one son gained this company, another son that one. ''Everything is done by my father,'' said another, Chung Mong Yoon. [Source: Don Kirk, New York Times April 26, 2001]

“For the last decade of his life, the abiding passion of Chung Ju Yung” — who served as honorary chairman of Hyundai in the last years of his life — “ the archetypal Korean conglomerate -- was to immortalize himself through his heirs. Yet in his final year, frail and stumbling, his voice sometimes slurred, he watched the group slowly disintegrate amid the rivalry of his sons and demands by the South Korean government for far-reaching changes.

“Not that his legacy has vanished. Even as some of his companies teetered near bankruptcy, three groups with Hyundai in their names ranked among the top 30 South Korean conglomerates a week after he died. The core group, under Chung Mong Hun, maintained a shaky hold on second place, after Samsung. The auto companies, under Mong Koo, the oldest surviving son, ranked fifth, while the Hyundai Department Store Company, under Mong Keun, was 26th. Put them all together, united by blood ties and old crossholdings, and Hyundai, meaning ''modern,'' would still be the leading group in all of Asia.

Chung Mong Keun, at 59 the second oldest, has long since become chairman of the Hyundai Department Store Company, and Chung Mong Yoon, 46, is adviser to Hyundai Marine and Fire Insurance. Both have separated from the group. Chung Mong Il, 42, the youngest, is chairman of Hyundai Finance, a relatively minor part of the group.

Chung Mong Koo and Hyundai Motors

Chung Mong-koo (1938-) is the head of the Hyundai Kia Automotive Group, the second largest business group in Korea. The eldest living son of Chung Ju Yung, he thought he would be given control of the entire chaebol but he was passed by senior Chung in favor of Chung Mong-hun, the favored fifth son. In 2000, Chung Mong Koo broke away and took over Hyundai Motors. On its own Hyundai Motors ranked as the 5th largest company in South Korea.

Don Kirk wrote in the New York Times: “Until 1998, Mong Koo believed that his status as the oldest surviving son guaranteed him the group's undisputed chairmanship. His greatest challenge came from Mong Hun, who served with him as co-chairman.” He was 63 when his father died, he headed the recently revived motor vehicle companies — but not the core group. ''Hyundai-Kia auto group will succeed my late father's Hyundai family as the legitimate heir,'' he said, giving equal emphasis to Kia Motors, which Hyundai took over in 1998. [Source: Don Kirk, New York Times April 26, 2001]

In 2011 Hyundai Kia Automotive Group took over Hyundai Construction. At that time, Forbes reported: “ Hyundai Motor officials insist that blunt, tough-talking Mong-Koo, who long ago earned the nickname Bulldozer, saw the Construction acquisition as strictly business — even as he embraced the company like a long-lost relative. Striding into Construction’s headquarters on Apr. 1, he announced a $4.6 billion payment to the creditors for 34.9 percent of the shares. He would now work out of his father’s old office suite in the building, rather than at Hyundai Motor’s distant towering headquarters. [Source: Forbes, April 26, 2011]

“Normally reticent, Mong-Koo was exuberant as he addressed nervous Construction executives in a packed meeting in the basement auditorium. “Hyundai Motor Group plans to build up the construction sector as ‘the third core,’” he declared, ranking it with motor vehicles and steel as a pillar of Hyundai Motor, which is second in revenue among the country’s family-led conglomerates to sprawling Samsung. He ranks second on our annual list of Korea’s 40 richest, with a net worth of $7.4 billion, behind Samsung Chairman Lee Kun-Hee.

“But why would a chaebol that sold 5.7 million units worldwide last year–edging out Ford for fourth place behind Toyota, GM and Volkswagen–crave the unique distinction among motor vehicle makers of owning huge construction and steel interests? As far as Mong-Koo was concerned, the answer was synergy, not sentiment. “Together with the worldwide global network of Hyundai Motor,” he said, “global competitiveness in steel, railways and finance will be a threshold for Hyundai Construction to become a leading company.”

Chung Mong-Koo, who has watched the consolidated net income of his 40-plus companies rise more than four times over, to $6.8 billion, since Hyundai Steel joined the group in 2004, scored his latest coup at an opportune moment. Construction’s $8.9 billion in revenue last year was “the highest ever for a Korean construction company,” he boasted. “This achievement, produced by your efforts,” he said, mingling praise with an admonition to do still better, “will be a stepping stone into the future.”

Is it possible, however, that Chung Mong-Koo has strayed too far from when Hyundai Motor had one product line, motor vehicles? Says Jang Ha-Sung, a business professor at Korea University: “There’s no obvious reason why Hyundai Motor needs a construction company,” except that “every large chaebol has one.”

Chung Mong Hun, the Hyundai Group and the Loss of Its Key Affiliates

Chung Mong-hun (1948-2003) was the former chairman of the Hyundai Group and heir apparent to his father. The favored fifth son, took over what was left of Hyundai, under Hyundai Engineering and Construction, mostly indebted or only slightly profitable subsidiaries. Hyundai Engineering and Construction and Hyundai Electrics (which changed its name to Hynix Semiconductor) were taken over by non-Chung family members. Chung Mong-hun committed suicide, leaving his wife Hyun Chung-eun (1956-) in control of the Hyundai Group.

At the time Chung Ju Yung’s death in 2001, Don Kirk wrote in the New York Times: “Mong Hun, 52, still suffers the humiliation of losing Hyundai Engineering and Construction, the first company founded by his father, in 1947. ''It cannot be in the group when the banks hold the equity,'' the executive said, referring to the plan for creditors to take a controlling stake by swapping some of Hyundai Construction's $5 billion debt for equity at the next shareholders' meeting in May. [Source: Don Kirk, New York Times April 26, 2001]

“Then there is Hyundai Electronics, which Mong Hun ran in a losing competition with Samsung Electronics from the time his father founded it 28 years earlier. In two months, it will be separated from the group, having sought to reinvent itself by abandoning the Hyundai name to become Hynix Semiconductor -- ''a modern, youthful leading player in the global semiconductor market,'' a spokesman said. The company's chairman, Park Chong Sup, long a faithful Hyundai hand, now disavows any association with Hyundai while lapsing into silence when asked about Mr. Hun, for years his immediate superior.

“And Hyundai Heavy Industries, founded by Chung Ju Yung in 1973 and still the world's largest shipbuilder, also plans to join the flight to the exits by year's end. For Mong Hun, the loss of Hyundai Heavy Industries carries another kind of humiliation. Unlike Hynix or Hyundai Construction, it will remain in the family under a younger brother, Chung Mong Joon, 49. For Mong Hun, now the least fortunate son, the worst hurt was dealt by Mong Koo, whose rise to power over motor vehicles dominated much of the final period of their father's life.”

Chung Mong Joon, Politics, Soccer and Hyundai Heavy Industries

Chung Mong-joon (1951-) is a politician and de facto owner of Hyundai Heavy Industries, the world's largest shipbuilding firm, as well as vice-chairman of FIFA. Chung Ju Yung’s third son, he took over Hyundai Heavy Industries, the shipbuilding branch, which was forced to break off from Hyundai and part of a reform effort after the 1997-1998 Asian Financial Crisis. He officially resigned as head of Hyundai Heavy Industries in 1989 but retained power there. Chung Mong Joon is head of the Korean Football Federation and was involved in bringing the World Cup to South Korea in 2002. He ran unsuccessfully for president in 2002.

At the time Chung Ju Yung’s death in 2001, Don Kirk wrote in the New York Times: “Mong Joon leads possibly the most charmed life of any of the sons. Once chairman of Hyundai Heavy Industries, he gave up the title but not the power more than a decade ago to run successfully for Parliament. His father saw him as the son with charisma, the one who could rule the country while other sons ruled his companies. [Source: Don Kirk, New York Times April 26, 2001]

“The patriarch, in an unsuccessful run for president in 1992, turned to Mong Joon as his right-hand man. Chung Ju Yung wound up with only 16 percent of the vote, yet Mong Joon thinks that the experience he gained in that campaign may serve him well as he contemplates running for president himself in 2002. ''Our campaign was amateurish,'' said Mong Joon, who is sure to bask in the spotlight as chief of the Korean Football Association, the co-host, with the Japanese, of the 2002 World Cup. ''We learned a lot.''

“Hyundai Heavy Industries' biggest problem is that it has been rich enough in recent years to try to rescue other Hyundai companies, notably Hynix, to which it extended more than $1 billion in payment guarantees. But such generosity cannot go on as the government investigates Hyundai Heavy Industries' links to the rest of the group and creditors complain about transparency.”

Disputes and Tensions Between Chung’s Sons

On relations between Chung Ju Yung’s sons after his death in 2001, Don Kirk wrote in the New York Times: “Fraternal tension has shattered any thought of unity, a tension that has intensified since the patriarch's death. The sons have gone their separate ways -- each in charge of a company or group of companies. While acclimating themselves to life without father, each tries, with widely varying degrees of success, to live up to the legacy. ''Hyundai-Kia auto group will succeed my late father's Hyundai family as the legitimate heir,'' Mong Koo said. His remarks came days after the entire family, down to grandchildren, nieces and nephews, met for the first time in years for the patriarch's funeral. [Source: Don Kirk, New York Times April 26, 2001]

“The family's story is one of triumph, tragedy, feuding and scandal — all rooted in the drive of the founder, a peasant's son from what is now North Korea, to earn a fortune and leave it to his sons. To a point, the story is typical, for all Korean conglomerates are family-dominated, all marked by conflict and scandal. But it would be difficult to top the stories surrounding this family.

“Hyundai executives, at group headquarters beside the Secret Garden, playground of royalty a century ago, sometimes speak of the struggle for power as if it were over, a bad dream fading before a brighter future. But when asked about the time Mong Koo refused to receive Mong Hun, or the refusal of other brothers to make loans to companies that Mong Hun supposedly controlled, one executive, insisting on anonymity, responded with a plea not to draw him into trouble. ''There were some problems,'' he said, ''but they're all sorted out now, particularly after the final separation of Hyundai Motor from the rest of the group.''

“Until 1998, Mong Koo believed that his status as the oldest surviving son guaranteed him the group's undisputed chairmanship. His greatest challenge came from Mong Hun, who served with him as co-chairman. The father opted for Mong Hun, sitting between the two brothers at Hyundai headquarters last May, having them shake hands and announcing that Mong Hun would be group chairman while Mong Koo would run motor vehicles.

“Always overshadowing the fraternal rivalry were the deaths of two other sons. In 1982, the oldest, Chung Mong Pil, who would have been the automatic choice to become group chairman, died in an auto accident. Eight years later, Chung Mong Woo, long subject to fits of depression, committed suicide.

Failures of Chung Mong Hun and the Break Up of Hyundai

Don Kirk wrote in the New York Times: “The pressure intensified on Mong Hun, already Hyundai Electronics' chairman, when his father made him chairman of Hyundai Engineering and Construction, Hyundai Merchant Marine and Hyundai Securities as well as Hyundai Asan, the operation charged with doing business with North Korea. But in his rise to seemingly undisputed prominence, Mong Hun incurred not only the jealousy of Mong Koo but also the anger of government economists, who ascribed Hyundai's mounting financial problems to nepotism. [Source: Don Kirk, New York Times April 26, 2001]

“At the end of May, Chung Ju Yung and Chung Mong Hun did the unthinkable and relinquished their titles. But Mong Koo, humiliated by Mong Hun in the war for leadership, signaled a fight to the finish at Hyundai Motor, and his board supported him. In fact, it had been little more than a year since Mong Koo, after overseeing the production of vans by Hyundai Precision and Industry, seized the helm of Hyundai Motor after another power struggle.

“Mong Hun was left last June with only one title, that of chairman of Hyundai Asan. But that post, too, carried the seeds of failure. Hyundai Asan has said it cannot afford the $12 million monthly fee demanded by North Korea for tours to Mount Kumkang, near the village of Asan, where Chung Ju Yung was raised, and Mong Hun was in the North Korean capital, Pyongyang, this week trying to negotiate a new agreement. While pleading with Pyongyang officials for understanding and the banks for debt relief, Mong Hun has little chance of fulfilling his father's final dream — construction of a $20 billion industrial park in the North. Mong Hun's disappointments contrast not only with the success of Mong Koo and Mong Joon but also with the relatively ordered existences of the three other brothers.

Chung Mong Hun Commits Suicide

In August 2002, Chung Mong Hun committed suicide. Gordon Fairclough wrote in the Wall Street Journal: “ A scion of the man who built the Hyundai business empire — facing trial for his role in the covert transfer of funds to North Korea before a June 2000 summit meeting between dictator Kim Jong Il and then South Korean President Kim Dae Jung — apparently killed himself by jumping from his 12th-floor office. Chung Mong Hun, the 54-year-old chairman of closely held Hyundai Asan Corp., which is involved in tourism and other ventures in North Korea, was found dead outside a Hyundai building in downtown Seoul Monday morning, police said. [Source: Gordon Fairclough, Wall Street Journal, August 4, 2003]

“Police said he left a note asking his employees' forgiveness for his suicide as well as a letter urging a business subordinate to continue the projects in North Korea. In a third note, addressed to his wife, Mr. Chung asked that his body be cremated and the ashes scattered at Mount Kumgang in North Korea, where his company manages a resort, the police said.

“Mr. Chung was indicted in June on charges that he helped falsify company accounting records to hide multimillion-dollar transfers of money to North Korea. A government-appointed independent investigative committee concluded that same month that "it could not be denied" that $100 million of the payments were "related to the summit." Soon after the historic North-South summit, Kim Dae Jung was awarded the Nobel Peace Prize. A report by the independent investigative committee, released in late June 2003, says the South Korean government in April 2000 "promised" to send $100 million to North Korea. The next month, the report says, Kim Dae Jung's chief of staff asked Hyundai Asan to deliver the money on the government's behalf.

In addition to Mr. Chung, seven other people, including government officials, have been indicted in connection with the scandal, which has seriously tarnished the reputation of former President Kim and his so-called sunshine policy of engagement and rapprochement with North Korea. Mr. Kim has said his government approved money transfers by Hyundai despite "legal problems," but that the payments had "facilitated peace on the Korean peninsula." Mr. Chung, in addition to his duties at Hyundai Asan, was a director of Hyundai Merchant Marine, a trading company. Shares of Hyundai Merchant Marine dropped 8.7 percent on the Korea Stock Exchange.

Chung Mong Hun’s Wife Wrestles For Power in Hyundai

In 2010, Chung Mong Hun’s wife Hyun Jeong-eun tried ro fight for a larger share of the Hyundai pie for her family. Christian Oliver wrote in the Financial Times: “For a former housewife suddenly handed the family business seven years ago, Hyun Jeong-eun, chairwoman of Hyundai Group, has quickly learned how to rally the troops. In an address to her employees” in early 2010, “she stressed they had to make the takeover of Hyundai Engineering & Construction their top priority. She accepted that the $2.6bn deal would not be for the faint-hearted. She exhorted her employees to take on the spirit of “white tigers” and to “ride the winds and plough the waves”. She explained: “To ride the winds and plough the waves means to fearlessly and steadfastly pursue a goal regardless of setbacks.” [Source: Christian Oliver, Financial Times, September 24, 2010]

“The sales process sets her sprawling, indebted group against the highly profitable Hyundai Motor, run by her formidable brother-in-law, Chung Mong-koo. Mrs Hyun won the chairmanship of the hotch-potch company, that has units ranging from shipping to lifts, after her husband’s suicide in 2003. But amid Seoul’s patriarchal family business culture, her position as a leader is undermined because her daughters are not seen as suitable heirs to the Hyundai throne. However, in its battle for the engineering business, Hyundai Motor could have to contend with public sympathy for Mrs Hyun, which counts for a lot in South Korea. “The last thing we need is for her to cry on television,” said a source close to her rival’s bid. Her rivals also fear she will play up the fact that Chung Ju-yung, Hyundai’s founder, favoured her late husband as his heir, intervening on his behalf in public spats with Mong-koo.

“However, she has much to prove financially. A takeover of Hyundai Engineering & Construction is an extremely bold way of trying to meet the group’s target of increasing sales seven-fold by 2020. Hyundai Group has been wrestling with heavy debts. It finally won a long-running court case against its creditors this month. The banks had been refusing fresh loans to Hyundai Group until it slashed its debts, notably at the shipping division, Hyundai Merchant Marine. Mrs Hyun successfully argued that the block on fresh funding had persisted too long, insisting that the shipping company had swung back into profit.

“Financial sources in Seoul say Mrs Hyun has been considering a tie-up with Middle Eastern funds to pursue the bid. They say Gulf investors are particularly attracted to a stake in Hyundai E&C because of its massive Middle Eastern presence. However, Hyundai Group is not making its financial position public. Hyundai Motor counters that it has Won5,000bn ($4.3bn) in ready cash and can use its network of developing world contacts to merge seamlessly with the engineering and construction business.

Chung Mong-Koo Takes Over Hyundai Construction and Firms Up Control Over the Remnants of Hyundai

In April 2011, Forbes reported: “Chung Mong-Koo — the eldest surviving son of the late Hyundai Group founder, Chung Ju-Yung — opened a new chapter in Hyundai history last month. Some 12 years after his father made him chairman of Hyundai Motor Group over a cousin who already had the job, Mong-Koo celebrated another momentous victory in the running family soap opera. The prize: his father’s most treasured legacy, Hyundai Engineering & Construction. It was founded in 1947 as the “mother company” of the empire but became a victim of the 1997?98 economic crisis and then of profligate spending in dubious attempts to open up North Korea to tourism and investment. [Source: Forbes, April 26, 2011]

“The sad loser: Hyun Jeong-Eun, widow of the founder’s fifth son, Chung Mong-Hun. She had taken over the separate Hyundai Group after her husband jumped to his death in 2003 from Construction’s historic central Seoul headquarters. Mong-Hun had seen Construction collapse into bankruptcy and was under investigation for secretly routing hundreds of millions of dollars into North Korean coffers to bring about the June 2000 summit between North Korea leader Kim Jong Il and the late South Korean president, Kim Dae-Jung.

“Normally reticent, Mong-Koo was exuberant as he addressed nervous Construction executives in a packed meeting in the basement auditorium. “Hyundai Motor Group plans to build up the construction sector as ‘the third core,’” he declared, ranking it with motor vehicles and steel as a pillar of Hyundai Motor, which is second in revenue among the country’s family-led conglomerates to sprawling Samsung. He ranks second on our annual list of Korea’s 40 richest, with a net worth of $7.4 billion, behind Samsung Chairman Lee Kun-Hee.

“Like his father before him, Mong-Koo, who turned 73 in March, is thinking of his own legacy–and getting his only son, 40-year-old Chung Eui-Sun, in line to succeed him. “ES,” who ranks No. 5 on the rich list with $2.4 billion, has been on a fast track since joining a Hyundai Motor subsidiary in San Francisco in 1994. Judged ready to stand in for his father after five heady years as president of fast-growing Kia, he was elevated to group vice chairman two years ago. Behind the scenes he and his father have been scrambling to ensure they have the shares to guarantee succession.

“Ultimately Eui-Sun may take charge of Construction. Before becoming vice chairman he not only oversaw a steady increase in Kia sales but also gained valuable experience running Hyundai Amco, a small construction subsidiary that has built Hyundai Motor plants in Brazil and Russia. Eui-Sun owns 25 percent of Amco and, portentously, Mong-Koo named a man from Amco as chief executive of Construction. “Construction is a lucrative business,” says Kim Sang-Jo, executive director of Solidarity for Economic Reform, which brought an insider trading case against Mong-Koo that led to a $70 million fine. But, “the most important motive is hidden, the private family benefit. Hyundai Construction was the starting point for Hyundai. If you have Construction, you are the main heir.”

Family More Divided Than Ever After Chung Mong-Koo Firms Up Control of Hyundai

The price of Hyundai Motor’s take over of Hyundai Construction, Forbes reported, “in terms of family relations, though, has been high. Ever since fending off a hostile takeover bid by founder Chung Ju-Yung’s youngest brother soon after husband Chung Mong-Hun’s death, Hyun, 56, had set her sights on Construction. Her Hyundai Group seemed to have got it when it was named the preferred bidder last year. The rivalry got ugly, though, when Hyundai Motor spread word that Hyun had failed to raise enough money. Hyundai Group threatened to sue for defamation, but a court agreed in December that the group could not support the loan of slightly more than $1 billion that was needed for the deal. [Source: Forbes, April 26, 2011]

“The bitterness runs deep. Chung Mong-Koo and Hyun were photographed bowing and smiling at an exhibition marking the tenth anniversary of Chung Ju-Yung’s death on Mar. 21, but she boycotted a ceremony at the founder’s grave attended by Mong-Koo and his four surviving brothers. Now Chung Mong-Joon, the next brother after Hyun’s late husband, represents a new threat. Mong-Joon, 56, owns a controlling 11 percent stake in shipbuilder Hyundai Heavy Industries, bequeathed to him by his father. A member of the National Assembly and honorary president of the Korean Football Association, he has long since given up the chairman and president titles at Hyundai Heavy. He’s worth an estimated $4.1 billion.

Much to Hyun’s chagrin, Hyundai Heavy owns 24 percent of Hyundai Merchant Marine, her group’s flagship, while Hyundai Motor got 7.8 percent when it purchased Construction. Hyun owns only 2 percent (her net worth is less than $300 million) but claims control of between 40 percent and 45 percent. However, companies controlled by her brothers-in-law with stakes in Hyundai Merchant Marine voted down her request for an increase in preferred shares needed to guarantee her group’s ownership. The legacy of their brother, her husband, seems forgotten aside from inscriptions in the Hyundai Group coffee shop extolling “his accomplishments and exemplary career,” including pursuit of South-North Korean cooperation as “a pioneer who put the prosperity of the nation and the people first.”

Chung Mong-koo’s Son Chung Euisun Takes Over Hyundai Motors

In October 2020. Chung Mong-koo’s son Chung Euisun officially took over Hyundai Motors Kim Jaewon of Nikkei reported: Hyundai Motor Group heir Chung Euisun has officially taken over the world's fifth-largest automaker from his ailing father, becoming the third generation of the founding family to lead the company. Hyundai announced that Chung was named chairman of the group with the endorsement of board members of Hyundai Motor, Kia Motors and Hyundai Mobis. Chung's father, Mong-koo, 82, resigned from the top job and given the title of honorary chairman. The group said Chung Mong-koo asked his son to lead the company recently, expressing his wish to step down. The senior Chung was hospitalized in July for diverticulitis, a gastrointestinal disease. [Source: Kim Jaewon, Nikkei, October 14, 2020]

“The announcement comes as Hyundai attempt to transform itself from an automaker into a "mobility solutions company" by developing autonomous driving and flying car technology. Hyundai is also investing in hydrogen fuel cars, as a bet on the next-generation energy. "Our world-class hydrogen fuel cell technology will be used not only in automobiles, but also in various fields as an eco-friendly energy solution for the future of humanity," the younger Chung said in a statement. "We will also realize the future of our imagination through robotics, urban air mobility, smart city and other innovations."

“But the company is struggling to overcome the coronavirus pandemic, which has caused its global sales to drop sharply. Hyundai Motor's sales fell 19.4 percent to 2.6 million units in the first three quarters from a year ago. The company is also involved in a recall of its flagship electric vehicle, the Kona SUV. After announcing an initial voluntary recall in South Korea due to a risk of fire, the company announced it is expanding the recall to the U.S. and potentially other overseas markets.

Image Sources: Wikimedia Commons.

Text Sources: South Korean government websites, Korea Tourism Organization, Cultural Heritage Administration, Republic of Korea, UNESCO, Wikipedia, Library of Congress, CIA World Factbook, World Bank, Lonely Planet guides, New York Times, Washington Post, Los Angeles Times, National Geographic, Smithsonian magazine, The New Yorker, “Culture and Customs of Korea” by Donald N. Clark, Chunghee Sarah Soh in “Countries and Their Cultures”, “Columbia Encyclopedia”, Korea Times, Korea Herald, The Hankyoreh, JoongAng Daily, Radio Free Asia, Bloomberg, Reuters, Associated Press, BBC, AFP, The Atlantic, The Guardian, Yomiuri Shimbun and various books and other publications.

Updated in July 2021


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