The Supreme Court on Thursday upheld a lower court's order for Hyundai Group Chair Hyun Jeong-eun to pay 170 billion won (US$131 million) to Hyundai Elevator to compensate for losses from financial derivatives contracts about a decade ago.
The ruling came after global elevator company Schindler Holding AG, the second-largest shareholder of Hyundai Elevator, filed a compensation lawsuit against Hyun and Han Sang-ho, former president of Hyundai Elevator, in 2014, claiming that the plaintiffs inflicted losses of nearly 700 billion won on Hyundai Elevator through derivative financial product contracts.
Schindler argued that Hyundai Group forced Hyundai Elevator to sign derivatives contracts to defend affiliated Hyundai Merchant Marine (HMM) from hostile M&A attempts.
Hyundai Elevator is the holding company of Hyundai Group, and HMM was separated from the group in 2016 after a management crisis.
A Seoul district court refused to accept Schindler's claim. But an appellate court ruled that Hyun should compensate 170 billion won because Hyundai Elevator suffered losses due to some derivatives contracts.
The Supreme Court then confirmed the appellate court's ruling, in which Han was ordered to jointly bear responsibility for 19 billion won of the total compensation.
The top court said Hyun and others did not fully review the necessity of signing the contracts or the risk of losses, or did not take necessary measures even after knowing the risk.
Schindler welcomed the top court's decision, saying it believes the ruling will ultimately strengthen the protection of the interests of Hyundai Elevator and all its shareholders.
Source: Yonhap News Agency