Bloomberg the Company & Products

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Schindler Billionaire Elevates Court Spat With Korea Partner

Hyundai Group Chairwoman Hyun Jeong Eun
Hyun Jeong Eun, chairwoman of Hyundai Group. Photographer: SeongJoon Cho/Bloomberg

Dec. 13 (Bloomberg) -- Billionaire Schindler Holding AG Chairman Alfred Schindler blasted Hyundai Elevator Co. for denying him access to its books, as he wages a legal battle to protect his 35 percent investment in the Korean company.

The Swiss elevator-maker is trying to overturn a ban on access to Hyundai Elevator’s accounts, after a Korean court blocked a review on the grounds that Schindler is a competitor with ulterior motives. Schindler is also attempting to end the Ichon, South Korea-based company’s use of derivatives linked to an unprofitable shipping affiliate, Hyundai Merchant Marine Co.

“We believe the behavior of Hyundai Elevator as measured by international standards of corporate governance is plainly unacceptable,” Alfred Schindler said in an interview, a rare public appearance since he stepped down as chief executive officer of the Hergiswil, Switzerland-based company last year.

The billionaire is intervening to personally resolve the spat and will hold a press conference in Korea next year about Schindler’s investment. The elevator heir, 63, started building a stake in the Korean firm in 2006 to participate in Asia’s construction boom.

Schindler is contending with Hyundai Group, which controls 47 percent of Hyundai Elevator, according to the Korean company’s third-quarter results. Schindler doesn’t have any directors on Hyundai Elevator’s board.

The Korean elevator-maker is also a key part of a web of cross-shareholdings linking Hyundai Group’s various different businesses. South Korea’s so-called chaebols often control units through interlocking stakes.

Wary Koreans

Hyundai Group said it’s wary of Schindler’s request for more information. The legal disputes have led to speculation that Schindler wants control of Hyundai Elevator, which is Korea’s dominant company in the industry. Hyundai Elevator has jumped 33 percent in Seoul trading since Nov. 30, when it announced the second Schindler lawsuit. In that case, the Swiss company is seeking to block investments that Hyundai Elevator uses to help keep control of Hyundai Merchant. The ship operator is Hyundai Group’s biggest business.

“We are suspicious whether the lawsuits come from their underlying interest in management,” the group said in reply to Bloomberg News questions.

Hyundai Group, headed by Chairwoman Hyun Jeong Eun, is separate from Hyundai Motor Group, which is run by the brother of Hyun’s late husband.

Takeover Speculation

“The second lawsuit has triggered speculation that Schindler may be interested in taking part in management,” said Go Hyun Soo, a Seoul-based analyst at Korea Investors Service Co., which has an investment grade credit rating on the Korean elevator-maker. “Still, Schindler may be trying to protect its investment in Hyundai Elevator by stopping management from using assets to maintain control of Hyundai Group units.”

Chairman Schindler said “we are just holding it, that’s all,” when asked whether his company planned to raise its stake in Hyundai Elevator or to seek control. He declined to comment on whether he wanted the Korean company to sell its direct stake in Hyundai Merchant. The elevator-maker owned 24 percent of the Seoul-based ship operator as Oct. 16, according to a Hyundai Merchant filing.

“The minority shareholder of the smaller entity pays for this ownership-risk,” Alfred Schindler said.

Hyundai Elevator fell 2.4 percent today to close at 101,000 won in Seoul, while the benchmark Kospi index advanced 1.4 percent. The stock has dropped 21 percent this year.

Stained Record

Failure to make good on Hyundai would be a stain on Schindler’s expansion that has helped lift the share price more than tenfold since 1989 and made Alfred Schindler one of Switzerland’s richest executives.

Schindler forged ahead with acquisitions throughout the 1990s from Russia to Brazil, dominating markets to prevent his family-firm from being taken over like rival Otis Elevator Corp. which was swallowed by United Technologies Corp.

The Schindler and Bonnard families, along with related parties, hold 70 percent of the voting rights in Schindler Holding, which is worth 15.5 billion Swiss francs ($16.6 billion).

While Hyundai Elevator has increased sales every year since the original Schindler deal, it has made losses in two of the last three years. That’s partly because of derivative contracts that help Hyundai Group control Hyundai Merchant by supporting allied shareholders.

Under the derivatives, Hyundai Elevator pays out when Hyundai Merchant’s stock value falls, Alfred Schindler said. Any profits from a price rise are shared, he said. The shipping company has plunged 37 percent since the end of 2010 amid a collapse in freight rates. Hyundai Elevator has rolled over some of the derivatives, it said in filings yesterday.

Schindler’s request for access “goes beyond simple accounting,” the chairman said, adding that he expects to have further information about the case in mid-January.

“Right now we have no say at all,” he said. “We have no influence whatsoever.”

To contact the reporters on this story: Patrick Winters in Zurich at; Kyunghee Park in Singapore at

To contact the editors responsible for this story: Benedikt Kammel at; Neil Denslow at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.