Hyundai Motor to cut stakes

Reuters

Seoul

Hyundai Motor and Kia Motors have been ordered to sell a combined 6.6 percent stake worth 440 billion won ($375.61 million) in steelmaking affiliate Hyundai Steel by Thursday to comply with ownership regulations.

Shares in Hyundai Steel tumbled as much as 6 percent in morning trade on Wednesday on news of the regulator's decision.

South Korea's Fair Trade Commission curbs cross-shareholdings involving affiliates of conglomerates, a common practice which has helped controlling families wield enormous influence despite holding tiny stakes in group companies.

The "circular shareholding" structure has been criticised for undermining corporate governance at South Korea's family-owned conglomerates, which form the backbone of Asia's fourth-biggest economy.