Hyundai Shareholders Meeting Expected To Reach Family Thanksgiving Levels Of Awkwardness
Hyundai Chairman and CEO Chung Mong-koo was convicted in Korean court for embezzling some $100m in company funds. Thanks to Korea's corporate crime-friendly legal system, Chung didn't spend day one (day woo?) in prison. While Hyundai's profits soared under Chung's leadership, indignant shareholders are baying for blood. Moral outrage? Nah. Hyundai's stock growth slowed to six percent last year in the wake of the scandal, well below the Korean benchmark index of 32 percent in the same period. Chung and his son Eui-son (who heads Kia Motors, so add nepotism to the score card) hoped to deflect public criticism by donating over $1b in stock to the public. Only they haven't done it yet. Most of the funds Chung removed from Hyundai's corporate coffers were spent on a slush fund to bribe public officials, which at least partially explains Chung's continuing freedom. It may also explain why many institutional investors appear to be standing behind Chung. Meanwhile, a minority group of shareholders is preparing a lawsuit claiming damages stemming from embezzlement and other mismanagement. This is so not a good thing.