Home / World Business
Wed, May 17, 2006 - Page 10 News List

Seoul indicts Hyundai's chief for embezzlement


Prosecutors indicted Hyundai Motor Co chairman Chung Mong-koo yesterday in an embezzlement and slush fund scandal gripping South Korea's largest automaker.

Chung, 68, who has been in custody since his April 28 arrest, was charged with embezzlement and breach of trust, said Kang Chan-woo, spokesman for the Supreme Prosecutors' Office, without disclosing specific amounts of money involved in those charges.

But the official said the tycoon created a slush fund of 103.4 billion won (US$109.5 million) with the embezzled money and that prosecutors were looking into how that secret money was spent.

He didn't say when the first hearing would be held.

At the time of seeking an arrest warrant for Chung, prosecutors said he was suspected of embezzling about 100 billion won in company money to create the slush fund, as well as of breach of trust for allegedly incurring about 300 billion won in damages to the company.

Hyundai offered no official comment on the indictment, but a company official who refused to be named said the automaker hoped Chung would return to management soon.

Chung's son, Eui-son, president of Kia Motors Corp, a Hyundai affiliate, has also been investigated, but wasn't indicted yesterday. Media reports said prosecutors plan to indict the junior Chung later.

Hyundai is suspected of using the slush fund, via at least two lobbyists, to seek favors from the government.

The lobbyists have been arrested on charges of receiving money from Hyundai in exchange for promises to help it win construction approvals and permits as well as other business favors. It is unclear whether the lobbyists bribed government officials.

The scandal comes as Hyundai and Kia Motors are aggressively expanding operations to achieve their goal of becoming the world's sixth-largest automaker by 2010.

This story has been viewed 2546 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top