Hyundai and Kia to buy back $616m in shares Hyundai Motor and Kia Motors have announced share buybacks worth Won670bn ($616m), in the South Korean carmakers" latest effort to appease investor fury at their multibillion-dollar investment in land for a new headquarters. Shares in the sister companies, which together rank fifth by sales among global carmakers, plunged in September after they and affiliate Hyundai Mobis revealed plans to spend $10bn on a plot of land in Seoul. Investors said this had damaged hopes of larger cash returns from the companies, whose share prices have long been held down by their meagre dividends, and raised alarm about their standards of corporate governance. Hyundai responded on Tuesday by pledging to buy back common stock worth Won367bn and preferred stock worth Won82tn, which it said was to "maximise shareholder value by stabilising share prices." Kia said it would buy back stock worth Won221bn. Shares in the companies rose 4.8 per cent and 2.2 per cent, respectively, in morning trading in Seoul. Hyundai Mobis, which makes automotive parts, said it had no plans to buy back shares. The buybacks support suggestions that Hyundai has been taken aback by the scale of shareholder disapproval of the land deal, which has also weighed on the value of other South Korean companies as investors focus on the risks posed by the family-dominated chaebol business model. Chung Mong-koo, Hyundai's chairman, was reported as having told directors that "money is no problem," and directors were not aware of the bid sum before it was submitted, according to two people familiar with the process. Hyundai's "share price has fallen since the land deal, and it seems the company has recognised that as a problem. So it wanted to repair the damage," said Seo Sung-moon, an analyst at Korea Investment & Securities. As it reported quarterly results two weeks ago, Hyundai said it was looking at increasing its dividend next year and instituting an interim payout. Last year Hyundai's dividend amounted to 6.3 per cent of profit attributable to shareholders - about half the South Korean average, which is itself the lowest of any major market, according to analysis by CLSA. But even with Tuesday's gains, Hyundai's shares remain 20 per cent below their level immediately before the deal was announced on September 18, while the Kospi index was 5 per cent lower. As well as undermining hopes of higher cash returns, the land investment was seen as boding ill for research and development investment at Hyundai and Kia, which are struggling to keep up with global peers in developing more fuel-efficient vehicles. Hyundai says the deal should be seen as a long-term vehicle for "far-reaching synergies" among 30 Hyundai Motor Group companies that will be based at the new headquarters. Additional reporting by Tae-jun Kang