KOREA: Hyundai, KCC wage propaganda war

The respective heads of Kumgang Korea Chemical Co. and Hyundai Elevator Co. are escalating their dispute over control of the elevator company into a propaganda war

The Korea Herald
Monday, December 8, 2003

The respective heads of Kumgang Korea Chemical Co. and Hyundai Elevator Co. are escalating their dispute over control of the elevator company into a propaganda war, as they strive to win public support ahead of a court battle and a planned new share offering by the elevator maker.

Chung Sang-young, founder and honorary chairman of Kumgang, known as KCC, plans to run advertisements in local vernacular daily newspapers starting today to explain in detail his position on the feud with Hyun Chung-eun, the Hyundai Elevator chairwoman and widow of Chung's deceased nephew, Chung Mong-hun.

According to KCC, the elder Chung's statement will be based on a lengthy letter he sent to local journalists last week. In it, he explained that he had decided to acquire shares in Hyundai Elevator, the virtual holding company of Hyundai Group, in order to protect the troubled conglomerate from possible hostile takeover attempts, a request that he said was made by Chung Mong-hun before his death.

He also elaborated on how much he loved his nephew, stressing that the Chung family should have control over Hyundai.

The statement came amid mounting public criticism that the KCC chief was attempting to gobble up his nephew's control over Hyundai Group, taking advantage of the conglomerate's trouble.

"Honorary Chairman Chung regrets that despite the letter, his side of the story was not delivered to the public enough," a KCC official said. "I understand that he has decided to run the ads on newspapers to let the public know the truth about the Hyundai problem."

The KCC official added that the cost for the advertisements would "come out of Chung's pocket."

Hyundai Elevator and its embattled chairwoman is also running newspaper ads today to urge the public to buy its new shares to be issued Dec. 15 and Dec. 16.

The public offering of 10 million new shares is part of Hyundai Elevator's plan to dilute all existing shareholdings by nearly two-thirds, after KCC and its chief claim to have secured a controlling stake in the elevator maker.

A local court will determine later this week whether to accept KCC's petition for an injunction to stop the new share offering.