RESTRICTED
FM SEOUL
TO PRIORITY FCO
TELNO 146
OF 170738Z MARCH 92
AND TO PRIORITY BTC HONG KONG
RESTRICTED
62
177531
MDLIAN 2187
TOP COPY
Q DIST?
HKA
182/3
Pa
ns
1713
PERSONAL FOR HEAD OF HKD, FCO AND HEAP, BTC HONG KONG
50
MY TELNO 133: HYUNDAI
.
1 I HAD CHAIRMAN CHUNG SE-YUNG OF HYUNDAI TO LUNCH ON 13 MARCH FOR WHAT WAS TO HAVE BEEN A TOUR D'HORIZON OF COMMERCIAL LINKS, BUT WHICH FOCUSSED ON THE COMPANY'S POLITICAL STRUGGLE WITH THE GOVERNMENT (SEE MY FORTHCOMING TELELETTER TO MORRIS) AND THE BRIDGE.
2. CHUNG CAME STRAIGHT TO THE POINT ON THE HONG KONG CONTRACTS AND SAID HE THOUGHT THE GOVERNOR WAS IN A FIX. THE HYUNDAI OFFER WAS DOLLARS 200 MILLION LOWER THAN THAT OF THE TRAFALGAR HOUSE CONSORTIUM, IT WAS TECHNICALLY SOUND AND A PERFORMANCE BOND WOULD BE OFFERED. ASKED ABOUT THE WIDE PRICE DISCREPANCY, HE SAID HYUNDAI HAD THE ADVANTAGE OF OPERATING WITHOUT PARTNERS. AS AN INTEGRATED COMPANY THEY WOULD BE ABLE TO MANUFACTURE MOST OF THE STRUCTURES WITHIN THE CORPORATION. IT LED TO EASIER PLANNING, PURCHASING AND COORDINATION. HE SAID THERE WAS NO REASON WHY HYUNDAI SHOULD NOT GET THE CONTRACT AND REFERRED TO A CONTROVERSY RUNNING IN THE HONG KONG CHINESE PRESS AS A RESULT OF THE RECENT
SELECTION OF UK CONSULTANTS AGAINST LOWER-PRICED COMPETITION. WE PROBED HYUNDAI'S PACKAGE FURTHER, CHAIRMAN CHUNG RESPONDED THAT HE NOW UNDERSTOOD WHY HE HAD BEEN INVITED TO LUNCH AND DECLINED TO BE PRESSED MUCH FURTHER. HE GAVE NOTHING AWAY ON THE QUESTION OF
EXPORT CREDITS.
3. AS MY TELELETTER TO MORRIS, FED MAKES CLEAR, THE COMPANY'S FEUD WITH THE AUTHORITIES IS BECOMING INCREASINGLY POISONOUS AS THE 24 MARCH GENERAL ELECTION APPROACHES. IN PARTICULAR, THE GOVERNMENT ARE PUTTING GREAT PRESSURE ON HYUNDAI'S LIQUIDITY BY PREVENTING THEM FROM ISSUING BONDS AND, ACCORDING TO CHUNG, INTIMIDATING PRIVATE FINANCERS. CHUNG'S EXECUTIVES EXPECT MATTERS TO GET ROUGHER AS THE ELECTION CAMPAIGN PROGRESSES. AND TO SUPPORT THIS VIEW, THE LEADERS OF THE COUNTRY'S PRINCIPAL ECONOMIC ORGANISATIONS - EFFECTIVELY ALL HYUNDAI'S TRADITIONAL ALLIES CALLED ON CHUNG
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