February 17, 2025

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Hyundai Motor Group Becomes KT Corporation’s Largest Shareholder

Hyundai Motor Group Becomes KT Corporation’s Largest Shareholder



Hyundai Motor Group has officially become the largest shareholder of KT Corporation, one of South Korea’s leading telecommunications companies. The Ministry of Science and ICT announced on September 19 that KT’s application for a change in its largest shareholder had passed the public interest review committee on the same day, effectively granting Hyundai Motor Group the position of the largest shareholder.


The journey to this point began in September 2022, when Hyundai Motor Group acquired KT shares through a share swap while promoting future mobility business cooperation with KT. At that time, the investment was specified as ‘general investment’ rather than “management participation.” This distinction played a crucial role in the recent approval process.


In March, the National Pension Service (NPS), which was the largest shareholder of KT, sold some of its shares, reducing its stake from 8.53% to 7.57% by disposing of 2,884,281 shares. Consequently, Hyundai Motor Group, which holds a total of 8.07% of KT shares through Hyundai Motor (4.86%) and Hyundai Mobis (3.21%), became the largest shareholder.


The public interest review committee, mandated by Article 10 of the Telecommunications Business Act, conducted a thorough review following the NPS’s sale of shares. The committee’s role is to ensure that any change in the largest shareholder of a key telecommunications operator does not negatively impact public interest. The Ministry of Science and ICT can impose penalties if such a change is deemed harmful.


The committee explained that it comprehensively considered several factors, including the fact that there would be no changes in business content after the change in KT’s largest shareholder. They also noted that Hyundai Motor Group became the largest shareholder involuntarily, without acquiring additional shares, and holds shares for simple investment purposes without intent to participate in management. Furthermore, the committee highlighted the difficulty for Hyundai Motor Group to exercise substantial management rights with its current stake.


“No changes in business content after the change in KT’s largest shareholder,” stated the Public Interest Review Committee. They further elaborated, “Hyundai Motor Group becoming the largest shareholder involuntarily without acquiring additional shares and holding shares for simple investment purposes without intent to participate in management.”


The Ministry of Science and ICT echoed these sentiments, confirming that KT’s application for a change in its largest shareholder had passed the public interest review committee on the same day. This decision has drawn significant attention, as it effectively grants official approval for Hyundai Motor Group to be KT’s largest shareholder. However, it is expected that Hyundai Motor Group will not directly participate in KT’s management.


The public interest review committee concluded that the change in the largest shareholder would not negatively impact public interest, allowing Hyundai Motor Group to maintain its position. This decision underscores the importance of distinguishing between holding shares for investment purposes versus active management participation, a crucial factor in the committee’s approval.


This development is set against the backdrop of Hyundai Motor Group’s strategic collaboration with KT on future mobility business ventures, highlighting the evolving landscape of corporate partnerships and investments in South Korea. The regulatory environment, particularly concerning mergers, acquisitions, and changes in significant shareholdings, aims to protect public interest and maintain market stability.

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