Honorary Chairman Jeong Mong-gu Steps Back from Management, Will Hyundai Motor's Governance Restructuring Accelerate?

Chung Mong-koo, Honorary Chairman of Hyundai Motor Group

[Asia Economy Reporter Changhwan Lee] Honorary Chairman Chung Mong-koo of Hyundai Motor Group has officially stepped down from group management by relinquishing his last registered director position at Hyundai Mobis. It is expected that discussions on restructuring the governance centered on Hyundai Motor Group Chairman Chung Euisun will accelerate.

According to the business community on the 22nd, Honorary Chairman Chung will resign from his registered director position at the Hyundai Mobis shareholders' meeting scheduled for the 24th of next month. His term as an inside director at Hyundai Mobis expires in March next year. However, since he has already handed over overall group management rights to his son, Chairman Chung, he decided to retire without completing the term.

With Honorary Chairman Chung stepping down from the front lines of management, the business restructuring of Hyundai Motor Group centered on Chairman Chung is expected to accelerate. Chairman Chung has defined the new future of Hyundai Motor Group as a ‘future mobility solutions company’ and is leading the change.

Last October, he emphasized, "In the future, I believe 50% will be automobiles, 30% personal aerial vehicles (PAV), and 20% robotics, and within that, the company will mainly transform into a service-oriented business."

Speeding up governance restructuring is also anticipated. Hyundai Motor Group’s major shareholders, Chairman Chung and Honorary Chairman Chung, are at the center of a circular shareholding structure involving Hyundai Mobis, Hyundai Motor Company, and Kia.

Among major domestic conglomerates, Hyundai Motor Group is the only one that has yet to dismantle its circular shareholding structure. To strengthen Chairman Chung’s management rights, the circular shareholding structure must be resolved, and Chairman Chung’s group governance must be reinforced.

In particular, except for Hyundai Glovis, in which Chairman Chung holds a 23.29% stake, he does not have many shares in core affiliates. Chairman Chung faces the challenge of increasing his shareholding in Hyundai Mobis and Hyundai Motor Company, which are key links in the group, as his current stakes remain low.

Inside and outside the group, there is speculation that Chairman Chung will actively utilize his stake in Hyundai Glovis to secure group control. It is expected that he will purchase Hyundai Mobis shares by selling or swapping Hyundai Glovis shares.

However, since a similar governance restructuring plan was abandoned in 2018 due to opposition from private equity funds and others, there is also a possibility that a revised Plan B, which enhances shareholder benefits, will be adopted.

This content was produced with the assistance of AI translation services.