Hyundai Merchant Marine Co. (HMM) sued its former largest shareholder Hyun Jeong-eun, chairman of Hyundai Group, and former executives on charge of breach of trust, accusing them of causing millions of dollars in losses for the shipper through unfair terms in the process of selling Hyundai Logistics.

The South Korean shipping company said on Monday it filed a lawsuit against Hyun and four former executives for arranging deals that caused huge financial losses for the shipper.

In July 2014, Hyundai Group sold off its 88.8 percent stake in Hyundai Logistics, including 47.7 percent held by HMM, to Lotte Group.

Hyun at the time was the head of the HMM managing board. The group decided to sell the logistics unit as part of a self-rescue plan for the sea carrier in return for debt relief from Korea Development Bank (KDB) and other creditors amidst a global slump.

The plaintiff accused Hyun and others for promising unfavorable terms to smooth the sales without discussing the plan with the rest of the board. Under the terms, HMM would use (Lotte) logistics services for five years, invest in 109.4 billion ($102.8 million) in subordinated debt issued by the logistics provider, and also compensate if the company cannot keep up an operating profit of 16.2 billion won annually over the following five years.

The shipping company said it also received civil lawsuit from Lotte Logistics demanding indemnity for last year’s lagging performance.

Hyun relinquished management rights in HMM and spun off the shipping business from Hyundai Group in August 2016. HMM’s largest shareholder now is KDB with a 13.2 percent stake. Hyun then held 13.4 percent in Hyundai Logistics. It remains unclear whether she had profited from the sale of her interest.

By Moon Ji-woong and Kim Hyo-jin

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