Business Groups and Related Party Transactions : A Case Study of Hyundai Motor's Corporate Governance

• Main Authors: Hsieh, Pei-Yin, 謝佩吟
• Other Authors: Chung, Hui-Min
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/2rb2vf

碩士 === 國立交通大學 === 經營管理研究所 === 102 === This research attempts to study the corporate governance of Korean companies. A study case with Hyundai Motor Group is conducted by analyzing its corporate governance and business model to identify the impacts of related party transactions and propose some conclusions and suggestions. Hyundai Motor Group is the second largest business group in South Korea. In 2006, Mong-koo Chung, chairman of Hyundai Motor Group gained huge private wealth and avoided inheritance tax through related party transactions created by Hyundai Glovis. It caused that Hyundai Motor Groups and its affiliates suffered ₩400 billion losses. The main reasons of this case were that Mong-koo Chung needed to lay more foundation for his son, Eui-seon Chung, to become his only heir. And he acquired the shares of Hyundai Glovis without reporting to the board of directors. Moreover, ‘Corporate Opportunity Doctrine’ did not exist in South Korea at that time. Although the case caused great loss to Group, the courts had been overly lenient to Mong-koo Chung because Korean business groups still operate as one giant entity. Therefore, in order to solve this kind of case social and economic structure of South Korea should be change, or there should have regulations to restrict managers’ activities. Also, Taiwan should legislate against that managers seize the company’s opportunity for their own benefit and cause losses of companies.