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Hyundai unveils big revamp
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May 31, 2000: 9:01 a.m. ET
Cash-strapped Korean giant to sell assets as founder Chung quits; son holds on
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LONDON (CNNfn) - Hyundai Group on Wednesday announced plans to ease a cash crisis by selling 3.7 trillion won ($3.3 billion) of assets, while founder Chung Ju-Yung resigned as chairman. The outgoing chief's son, however, appeared to balk at his father's announcement that he, too, would quit as head of Hyundai Motor.
The shake-up of Hyundai's businesses and upper ranks, which would see the group sell its Hyundai Elevator division, came after creditors slammed what they saw as the group's piecemeal efforts to address its liquidity crisis with a plan announced earlier this week to raise a smaller 543 billion won in asset sales.
 The decision came after Hyundai Construction and Engineering was forced to draw on $167 million in emergency relief funds from government-controlled banks last week.
Hyundai Elevator shares rose by the maximum amount allowed by the stock exchange, climbing 15 percent to 9,200 won. Shares of Hyundai Motor jumped 11 percent to 12,100 won, and Hyundai Electronics gained 11 percent to 17,600 won.
Chung's resignation from Hyundai is a watershed for the sprawling conglomerate, one of the five family-run business empires, or chaebols, that have been the defining feature of Korean business. Chung built the company from its beginnings as an auto repair shop in 1940 into a broad group with operations today in autos, electronics, energy, construction, finance, shipping, shipbuilding, metals and machinery.
"I strongly believe that independent management by professional managers in each company is the only way to be successful in the globally competitive market," Chung said in a letter announcing his resignation, adding that he took his decision after "deeply considering the contemporary trend of corporate management and the future of the Korean economy".
Staying or going?
Chung's letter said that he would relinquish all management responsibility
at Hyundai, and added that his sons Chung Mong-Koo, the chairman of Hyundai's automotive unit, and Chung Mong-Hun, the head of Hyundai Electronics Industries, would also resign "from all management positions," stressing that all three "will watch over the company ... only as shareholders."
But in a statement issued after the close of trading on the Seoul stock market, Hyundai Motor said Chung Mong-Koo "will continue devoting himself to leading the company into becoming a global player."
Korea Exchange Bank President Kim Kyung-lim, Hyundai's main creditor, said the bank supported the management change.
An analyst said familial squabbles at Hyundai were nothing new.
"I think the main question this raises is who is making all these decisions for Hyundai and why all the confusion?" Brian Hunsaker, head of research at Dresdner Kleinwort Benson, told Reuters
Hyundai's new recovery plan would involve the sale of 2.7 trillion won in securities, 700 billion won in real estate and 300 billion won "through other methods," the company said in a statement.
Hyundai, which had previously announced plans to shed more than a dozen subsidiaries through spin-offs and sales, including a proposal to split off its auto-related units, also said it would trim its planned level of investment this year to 4.3 trillion won from 6.5 trillion won. 
-- from staff and wire reports
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Hyundai Group
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