Sun, Sep 16, 2007 - Page 9 News List

Criminal tycoons pampered in South Korea

By Kelly Olsen  /  AP , SEOUL

Big shot captains of industry in South Korea who break the law have an ace in the hole: the leniency of their country's appeals court judges.

Two such tycoons -- Chung Mong-koo of Hyundai Motor Co and Kim Seung-youn of Hanwha Group -- within the past week stood before magistrates who suspended their prison terms for, respectively, embezzlement and assault.

In the most recent case on Tuesday, Hanwha's Kim, who runs a chemicals and finance conglomerate, had his 18-month jail term for organizing and taking part in a spectacular revenge beating earlier this year shelved largely as a result of a deterioration in his health.

And last week, Chung, who leads the world's sixth-largest automaker, listened in a packed Seoul courtroom to a judge suspend his three-year sentence, saying the 69-year-old is too vital to the country's economy to spend time in a prison cell.

Experts cited various reasons for the leniency, including the idea among South Korea's judiciary that the chance of a criminal recurrence by the offending executives is slim.

"Absolutely the judge will think there is no possibility they will commit the same crime again," said Hwang Ju-myung, co-founder of Seoul law firm Hwang Mok Park PC and a former judge himself.

In the case of Hyundai's Chung, South Korea's national interest trumped legal reasoning.

"I am also a citizen of the Republic of Korea," Presiding Judge Lee Jae-hong said in court. "I was unwilling to engage in a gamble that would put the nation's economy at risk."

Michael Breen, a longtime resident of South Korea and author of the book The Koreans, said it is hard for the chiefs of the country's economically dominant family run business empires, known as chaebol, to avoid illegal activity in a big business culture characterized by corruption.

"This is in a context where breaking the law is the norm," he said of wrongdoing by the business titans.

Kim's case drew wide attention as, rather than the usual corporate malfeasance, it was centered on headline-grabbing violence.

He was convicted in July of abducting and assaulting off-duty bar workers allegedly involved in an altercation with his son, threatening the victims with an electronic shock device and hitting one with a steel pipe.

Kim Deuk-hwan, the judge who handed down Tuesday's decision, condemned the crime, but cited Kim's health -- Hanwha officials say he has suffered from maladies including depression and insomnia since being jailed -- and the fact that he showed remorse.

But the judge also appeared to show some sympathy, telling the court that the executive "lost his sense of reason because of fatherly love after seeing his son's injuries."

Sparing chaebol chiefs from jail has a precedent.

In 2005, a court suspended a three-year prison term for accounting irregularities handed to Chey Tae-won, CEO and chairman of South Korea's leading oil refiner, SK Corp, now SK Energy.

Breen said the willingness of judges to show leniency can also be found in the idea that going through the humiliation of a trial and prison sentencing is probably punishment enough.

"The spirit of the law has been applied and the letter of the law doesn't need to be applied any further," he said.

Still, they have paid a price.

Both Chung and Kim, 55, were ordered to do community service and even though they escaped lengthy prison sentences, their convictions stand.

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