[SUPER RICH] Chung family makes mark in corporate Korea

By Korea Herald

Late Chung Ju-yung’s 15 trillion won Hyundai dynasty has grown into mainstay of Korea’s economy

  • Published : Apr 28, 2014 - 21:02
  • Updated : Apr 28, 2014 - 21:02
There’s a memorial hall in Ulsan where a tattered pair of white cotton gloves and three pairs of worn-out shoes are on display. They belonged to none other than the late founder and honorary chairman of Hyundai, Chung Ju-yung.

Chung built Hyundai with his bare hands, and these memorabilia are a reflection of his life and his family. 

There are now 183 fully operational Hyundai companies that together raked in 252 trillion won ($242 billion) in sales in 2013.

The amount is seven times the government’s national defense budget (35.8 trillion won) and 14 times its research and development budget (17.5 trillion won) for 2014.

In fact, just the stock assets alone of some of the family’s major figures are said to exceed 15 trillion won.

Hyundai lives on in Chung Mong-koo and Chung Eui-sun

Hyundai Motor chairman Chung Mong-koo and his son Chung Eui-sun, the vice chairman, are currently the biggest heavyweights of the Hyundai family.

After Chung Mong-pil, the late founder’s eldest son, died in a car accident at age 49, the second son Mong-koo assumed his older brother’s role.

Going back in history, a long-standing squabble between Chung Mong-koo and the late Chung Mong-hun ― the fifth son and former chairman of Hyundai Group ― had been no secret.

Despite such feuds, the Hyundai family continues to faithfully gather at Chung Mong-koo’s home for the traditional ancestral rites and family duties.

Today, these rituals serve to reinforce the status of the Hyundai Motor chairman. 

Chung Mong-koo, who was already in charge of the family’s primary subsidiaries such as Hyundai Motor, Kia Motor and Hyundai Steel, took over Hyundai E&C in 2011 to further extend his influence.

Hyundai Motor Group, led by him and his son, currently consists of 57 affiliates that attained combined sales of 158.8 trillion won, or 63 percent of the family’s entire revenue, in 2013.

Chung Mong-koo alone owns about 7.12 trillion won worth of stocks in companies such as Hyundai Motor, Hyundai Steel, Hyundai Mobis, Hyundai Hysco and Hyundai Glovis, while Chung Eui-sun’s shares amount to roughly 3.5 trillion won.

Although the chairman also has three daughters, none of them are directly involved in management affairs.

This makes his son Eui-sun his successor, and converting the bulk of the junior Chung’s Hyundai Glovis stocks into Hyundai Mobis shares is seen as the remaining and final task that will complete the succession. 

Hyundai Group, the roots of Hyundai

Up to the 20th century, it was Hyundai ― not Samsung ― that led Korea’s industrial circles. From 1977 to 2000, Hyundai had been the largest group by assets for 24 consecutive years.

That was until 1999 to 2002, when large affiliates like Hyundai Development, Hyundai Motor and Hyundai Heavy Industries spun off from the group.

When the late founder Chung died in 2001, the late Chung Mong-hun succeeded him before committing suicide in 2003 when he was indicted on charges of doctoring company books to hide money transfers involved in the “cash-for-summit scandal” under the Kim Dae-jung administration.
His wife Hyun Jeong-eun then took over the group’s management, but it is still facing financial troubles. It recorded a loss of 1.03 trillion won in 2013.

Although the group is currently undergoing restructuring of several of its core businesses, the future seems uncertain.

Likewise, the uncertainty is reflected in the group’s succession race as well, as it is difficult to predict which of the chairwoman’s three children ― two daughters and the youngest a son ― will end up leading the group.

The interest in the matter remains high, however, given that if Hyun’s eldest daughter gains control, it will be the first time in the Hyundai family history for a daughter to inherit management rights.

Chung Ju-yung’s other sons

There are yet others in the Chung family besides in Hyundai Motor Group, Hyundai Group and Hyundai Heavy Industries Group, that carry on the legacy.

Chung Mong-keun, Chung Ju-yung’s third son, helped mature the Hyundai Department Store Group, which his eldest son Chung Ji-sun currently heads.

Chung Ji-sun’s stock assets are estimated at around 270 billion won and he is involved in various industries apart from the department store such as homeshopping, broadcast, food and fashion.

Moreover, Chung Mong-yoon, the late founder’s seventh son, is also the chairman of Hyundai Marine and Fire Insurance where he raised profits up to 300 billion won in 2013.

By The Korea Herald Special Report Team