Concerns Expressed about HHIG's Monopoly
A panel discussion was held on June 15 to shed light on the problems of the merger between Hyundai Heavy Industries Co. (HHIC) and Daewoo Shipbuilding and Marine Engineering (DSME).
The meeting was organized by Min Hyung-bae and Lee Jung-moon, lawmakers of the Democratic Party, Seo Il-joon, a lawmaker of the People Power Party, Bae Jin-kyo, Ryu Ho-jung and Jang Hye-young, lawmakers of the Justice Party, the Lawyers for a Democratic Society, the Korea Metal Worker’s Federation and the Korean Confederation of Trade Unions. It was presided over by lawyer Kim Nam-geun of the People's Solidarity for Participatory Democracy.
The five panelists were all critical of the HHIC-DSME business combination. They said the merger would deepen HHIC’s monopoly in the domestic shipbuilding market, strengthen the status of Chung Mong-joon, the controlling shareholder of Hyundai Heavy Industries Group (HHIG), and deepen unfair trade practices in the shipbuilding industry
Lawyer Kim Jong-bo made a presentation on the problems involved in HHIG’s governance restructuring and the problems of the group’s monopoly of the shipbuilding industry. He asserted that HHIG’s governance restructuring has been implemented to favor the owner family of Chung Mong-joon. "In the process of splitting off HHIC, the company’s treasury shares were allocated to newly established Hyundai Robotics, reviving Chung’s voting rights. The Chung family strengthened their control through the holding company by participating in Hyundai Robotics’ capital increase," he said.
He also said the combination of HHIC and DSME is expected to intensify HHIC’s monopoly and strengthen the control of the shipbuilding industry by Chung Mong-joon and his family.
"If the business combination is realized at a time when conditional approval is likely, the belt of materials and equipment companies centered around HSD Engine will collapse, leading to the collapse of the local community," stressed Shin Tae-ho, senior vice chairman of the DSME Branch of the Korean Metal Worker’s Federation.
Lawyer Seo Chi-won criticized the marriage of Hyundai Heavy Industries and DSME, saying that a purchase monopoly on small and medium-sized subcontractors and equipment suppliers will be solidified.
"If Hyundai Heavy Industries fails to give a clear answer to the European Commission by the end of June, the company must cancel the contract," said accountant Song Duk-yong. "The National Assembly must demand the cancellation of the contract by Hyundai Heavy Industries."
Finally, the participating groups agreed to continue to raise problems with the combination of Hyundai Heavy Industries and DSME and actively respond to unfair conditions of the business combination.
Meanwhile, Hyundai Heavy Industries Group's holding company Korea Shipbuilding & Offshore Engineering applied for corporate reviews of its takeover of DSME in six countries, starting with the Fair Trade Commission in Korea in July 2019. The acquisition plan has been approved by Kazakhstan, Singapore and China, and reviews are underway in the EU, Korea and Japan.