Norwegian company to return profits from Hyundai Merchant Marine sale

Money made in share sale ruled illegal

Geveran Trading, which sold its stake in Hyundai Merchant Marine to Hyundai Heavy Industries in April, sparking outcry from the marine company, may return about 25 percent of the investment profit made, or some 11.5 billion won (12 billion USD). The move would come after Hyundai Merchant Marine cracked down on the sale under the terms of an investment regulation that requires a major shareholder to surrender his or her profits from short-term investment.

According to the Financial Supervisory Service and Hyundai Merchant Marine, Geveran Trading, a unit of Norwegian shipping company Golar LNG, had purchased a 13.9 percent stake in Hyundai Merchant Marine between 2004 and April this year. In April, Geveran Trading sold off the entire stake at a price of 18,000 won per share. However, profit from the stocks that Geveran Trading purchased since October last year will probably have to be returned. Under domestic stock trading law, employees of a company or major shareholder who own more than a 10 percent stake in a company are banned from selling the stake six months after their purchase. The regulation is meant to curb short-term gains from stock investment.

Hyundai Merchant Marine made the initial demand for Geveran Trading to return the investment profit. Hyundai Merchant Marine asked the court on July 7 to prevent Geveran Trading from selling its 6.24 million shares, or about 130 billion won, in Hanjin Shipping, as collateral for the profits owed from its Hyundai Merchant Marine stake sales; the court accepted the injunction.

Of the total 17 million shares sold by Geveran Trading, about 3.13 million shares will be affected by the regulation. Under the current share price of Hyundai Merchant Marine, the 3.13 million shares are worth about 11.5 billion won.