Shares of South Korea’s top automaker Hyundai Motor Co. and its affiliates Kia Motors Corp. and Hyundai Mobis Co. are continuing a rally amid expectations that the family-run business may soon pursue a major reorganizing into a holding and separate multi-operating entity structure under the new government’s vow to reform family-run chaebols.

According to the Korea Exchange on Saturday, shares of Hyundai Motors jumped 10.4 percent over the past five days to finish Friday at 170,000 won ($1,123) as foreign investors continued a strong net buying trend. Shares of auto parts supplier Hyundai Mobis surged 10.5 percent over the same period to end at 273,000 won, and those of Kia Motors rose 11.3 percent to 38,800 won since April 28.

Market experts attribute the recent rally of Hyundai Motor Group related shares to President’s Moon Jae-in’s nomination of Kim Sang-jo, a professor and outspoken critic of South Korean’s family-run chaebols, as the new chief of the country’s antitrust agency.

Kim during a conference on Thursday had mentioned Hyundai Motor Group as the country’s last conglomerate among the Korean chaebols where members of a single family over generations control an umbrella of companies and build riches with a limited equity share. And his statement worked as a catalyst for Hyundai Motor related shares to head upwards.

Hyundai Motors in a regulatory filing on Friday said that recent rumor of Hyundai Motor Group pushing ahead with reorganization scheme for holding entity structure reported by local media outlets is untrue, but the shares of the Korean auto giant and its affiliates continued the strengthening trend.

Despite the denial, market analysts predict the auto giant to turn into a holding company structure under the new government. They believe it is inevitable for the auto conglomerate to reform its ownership structure as it has to disconnect the cross-sharing connection that loops around Hyundai Motor, Kia Motor, and Hyundai Mobis.

Some propose the conglomerate to split up its three major companies - Hyundai Motor, Kia Motor, and Hyundai Mobis – into holding and operating entities and then have the holding entities merged into one. They believe the ownership structure reform could be achieved by merging Hyundai Glovis Co. and the holding entity or having the Hyundai Glovis shares held by Chung Euisun, Hyundai Motor Group vice chairman and an owner family member, be invested into the holding entity.

By Lee Seung-hoon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]