The Fair Trade Commission, the nation’s fair trade watchdog, is reviewing a recent stock deal made between Hyundai Motor Group and NH Investment and Securities to see if there was any irregularity involved in transferring the automakers’ stock ownership in Hyundai Steel, local news reports said.
Forced by the revised Korean fair trade act to ban a Korean big business group from creating a new cross-shareholding structure among its affiliates, the two automakers -- Hyundai and Kia -- sold their shares in their sister firm Hyundai Steel to the local securities company via the so-called “total return swap’’ deal on Feb 5.
According to a regulatory filing by Hyundai Steel, Hyundai Motor sold 5.75 million shares in the firm and Kia Motors sold 3.06 million shares at 50,400 won each.
The FTC forced the deal as they concluded the merger between Hyundai Steel and its sister company Hyundai Hysco last July created new cross-shareholdings in the automotive group’s governance.
“We are reviewing if the TRS, a type of derivatives, is equal to a real stock sale, ’’ an FTC official said.
Industry watchers said the automotive group could get approval from the authorities as its recent TRS deal didn’t have a stock buyback option.
By Seo Jee-yeon (email@example.com)