With regard to the planned sale of waste disposal business units by Hyundai Electronics Industries to France-based Vivendi Co., the FSS had no prior knowledge of the sale and the speculations raised by the vernacular daily, Chosun Daily, that the government intervened in the sale are unfounded and untrue.

In order to determine whether any irregular or unfair support was extended to HEI for the sale, the FSS questioned Hana Bank, which is lead-managing the syndicated loan arrangement for the purchase of the Hyundai waste disposal business by Vivendi Co. According to Hana Bank, six banks agreed to participate in the syndicated loan and contribute a total of KRW 146.6 billion towards the purchase, while Vivendi Co. would contribute KRW 83.2 billion.

It has been confirmed to the FSS that each of the six banks decided to participate in the syndicated loan based on the commercial merits. The banks participated in a competitive bidding process for the syndication in consideration of its profit potential and after conducting careful assessments of business feasibility.

The sale of the waste disposal units by Hyundai Electronics Industries is a part of its self-rehabilitation plan, which was announced on January 17, 2001. Vivendi Co. was selected as the preferred buyer due to a lack of interested domestic buyers.

Participation by banks in similar projects or sales -- known as acquisition financing -- is a common business practice in financial markets and does not in any way represent anomalous support for Hyundai Electronics Industries by the creditor banks.

* Please refer to the attached file for details.