Directors Weren’t Told Price of Hyundai Land Bid

The directors of Hyundai, Kia and Hyundai Mobis unanimously approved a group bid for prime real estate in Seoul's exclusive Gangnam district last week. But they weren't told the size of the offer, Reuters reports.

Hyundai won with a staggering $10 billion bid. The offer was more than three times the appraised value for the 20-acre site and reportedly about twice the size of the next-closest offer.

The deal has sparked a storm of protest among Hyundai shareholders, who had hoped the companies would hike their dividends instead. Reuters says the controversy also rekindles worries about corporate governance at South Korea's huge conglomerates.

Hyundai Chairman Chung Mong-koo has long coveted the land, which was sold by Korea Electric Power Corp. (Kepco). But in announcing the deal, he did not explain how the giant complex he wants to build there will enhance shareholder value. The site eventually is expected to house the headquarters of the three co-bidders, numerous other businesses, a hotel, convention center and other attractions.

Three directors tell Reuters they weren't advised of the $10 billion bid price because it was considered too confidential. Kepco says Hyundai's group bid won by a "wide margin." Two directors say intangible benefits make the purchase worth the cost.