Chung Mong-joon gifts HD Hyundai shares worth billions to son, triggering massive tax bill

Chung Mong-joon, chairman of the Asan Foundation, is set to transfer 2.8 million shares of HD Hyundai to his son, Chung Ki-sun, who also chairs the company. This marks the first time Chung Mong-joon has gifted shares since the company's inception.

The stock transfer, disclosed after market close on August 4, is subject to gift tax regulations. The value is calculated based on the average closing price of HD Hyundai shares in the two months before and after the gift date. With HD Hyundai's stock trading around 208,500 won per share on August 4, and considering a 20% premium for major shareholders, the estimated gift tax burden is around 350 billion won.

This share transfer will reduce Chung Mong-joon's stake in HD Hyundai from 26.6% to 23.05%. Conversely, Chung Ki-sun's holdings will increase from 4.83 million shares (6.12%) to 7.63 million shares (9.67%). Upon completion, Chung Ki-sun will surpass the National Pension Service, becoming the second-largest shareholder.

The move signals an acceleration in succession planning for Chung Ki-sun, who was promoted to group chairman in October last year. This significant share gift is a key step in solidifying his position within the HD Hyundai conglomerate.