SEOUL, May 20 (Korea Bizwire) – Hyundai Motor Group was warned by Korea’s Fair Trade Commission (FTC) on Thursday for missing the deadline for selling off its cross shareholdings.
Hyundai and Kia acquired 8.81 million new shares after merging two of their subsidiary companies, Hyundai Steel and Hyundai Hysco, in July 2015. The additional shares strengthened the group’s cross shareholdings, and in December the FTC ordered Hyundai to sell off the additional shares.
Hyundai sold the shares to NH Investment and Securities on February 5, but missed the deadline set by the FTC, which had offered a six-month grace period, resulting in a warning.
Regarding its relatively low-level sanctions, the FTC said that it saw no planned intention of expanding the group’s business control, and noted that Hyundai had been careful to avoid legal violations. Being the first case of Cross Shareholdings Prohibition Policy, implemented in 2014, it was unclear until December 2015 if the case was applicable to the policy.
The fact that Hyundai quickly rectified its violations was also taken into account.
By Kevin Lee (firstname.lastname@example.org)