Hyundai Motor and Kia Motors last month were ordered to sell a combined 6.6% stake in affiliated steelmaker Hyundai Steel, worth around US$376m, to comply with local chaebol (family conglomerate) ownership regulations. 

Shares in the steelmaker fell 6% on the immediate release of the news by South Korea's Fair Trade Commission.

The widespread practice of cross-shareholdings among affiliates of conglomerates is regarded by the regulator as undermining corporate governance in the country and is seen as enhancing the influence of controlling families in these companies despite often holding minority shareholdings.