Hyundai Group drops lawsuit against Hyundai Motor Group

SEOUL, Aug. 30 (Yonhap) -- Hyundai Group said Tuesday that it has decided to withdraw its lawsuit against Hyundai Motor Group, raising hopes of ending a feud between the business groups that once belonged to the same conglomerate.
The decision to withdraw the defamation suit against South Korea's largest carmaker is expected to end the legal battle that has stretched for several months after Hyundai Group was stripped of its primary bidder status to buy Hyundai Engineering and Construction Co. (Hyundai E&C) following claims that it could not raise the necessary takeover funds.
The claim were initially raised by Hyundai Motor Group, which also wanted to take over Hyundai E&C.
Because creditors of the builder were not satisfied with Hyundai Group's explanation, they nullified the decision to give the company first choice in buying the construction firm.
Hyundai Group is engaged in shipping, elevator production and economic cooperation with North Korea,
Creditors subsequently sold the world's 23rd-largest builder in terms of international deals won to Hyundai Motor Group, with the purchase finalized in April at a price of 4.96 trillion won (US$4.63 billion).
Hyundai Group, Hyundai E&C and Hyundai Motor Group were all founded by Chung Ju-yung and were part of the large Hyundai conglomerate before the entrepreneur's death in March 2001, when they split. The builder, which experienced hard times and faced insolvency, was acquired by creditors led by Korea Exchange Bank (KEB) in a debt-for-equity swap.
Hyundai Group said that the decision to end the legal wrangling was made for the sake of family unity ahead of the wedding of one of the founder's granddaughters planned for Sept. 3.
The wedding is for Chung Ji-yi, an executive vice president of the IT services firm Hyundai U&I and the eldest daughter of Hyundai Group chairwoman Hyun Jeong-eun, who is the daughter-in-law of Chung Ju-yung.
The conglomerate, however, said that its suit against KEB and other creditors has not been withdrawn. The lawsuit aims to revoke the decision to strip the company of its primary negotiation partner status in late 2010.
Corporate sources said that while nothing has been decided, the family members may hold talks to sell shares in Hyundai Merchant Marine, which is controlled by Hyundai E&C, to Hyundai Group. The shares are important because Hyundai Group could be exposed to hostile takeover bids unless it controls the shares in the shipping company.
Related to the thawing of inter-family tensions, Hyundai Motor Group, which currently controls 50 affiliates including Hyundai Motor Co. and Kia Motors Corp., said its chairman Chung Mong-koo is expected to attend his niece's upcoming wedding.
If the chairman, the eldest living son of Hyundai Group's founder, attends the ceremony, it may signal reconciliation of decade-long strife between family members.