The Hyundai Motor boss avoided going to jail yesterday when a South Korean court upheld his suspended prison sentence but it ordered him to undertake tougher community service involving physical labor.
Chung Mong-koo, who prosecutors had accused of raising a slush fund to bribe government officials, politicians and bankers in return for business favors, was given a suspended three-year jail sentence, an appeal court confirmed.
The court also ordered Chung to undertake 300 hours of public service involving manual work for charities or protection of the environment after an earlier order had been seen as too soft.
South Korean judges have a long record of imposing lenient punishments on chaebol — giant family-run conglomerates — bosses and other prominent white-collar criminals.
Chung, 69, was sentenced to three years in prison in February last year for breach of trust and embezzling 90 billion won (US$87.4 million) in company funds through fraudulent accounting.
An appeal court, however, quashed the prison term and replaced it with a three-year suspended sentence, saying his imprisonment would badly damage South Korea’s economy.
Chung had also been ordered to give lectures and write articles in the local media on business ethics — and to make good on his pledge to donate 840 billion won to charity.a
Prosecutors appealed, saying previous service orders involved physical labor.
In April, the Supreme Court ordered the lower court to reconsider its sentence saying lecturing or writing articles was not tantamount to labor as described in the criminal code.
“The defendant’s [crime] was extenuated by the fact that he had tried to address wrong practices and pledged to donate 840 billion won to society,” appeal court judge Kil Ki-bong said in his new ruling yesterday.
Hyundai Motor welcomed the court’s decision, which came two years after its boss was arrested. Chung remained free pending the new ruling.
“We are greatly relieved that this case is finally over. We can now focus all our energies on making the group a global leader,” it said in a statement.
The Hyundai group, including affiliate Kia Motors, controls 70 percent of the country’s auto market and accounts for 5.4 percent of GDP.
Chung, who had admitted the existence of the slush fund but said he was not directly involved in embezzlement, is aiming to make it the world’s No. 5 carmaker, from No. 6 currently.
His lawyers said the fund was spent helping improve the productivity and morale of employees and expanding sales networks, as well as for making donations to politicians.
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