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S Korean Hyundai Motor's chairman sentenced to 3 years in jail

From | February 06,2007

Hyundai Motor chief Chung Mong-Koo (C) after his sentencing trial at the Seoul Central District Court in Seoul. A South Korean court jailed the head of Hyundai Motor for three years for embezzlement and breach of trust. Chung, 68, chief of the nation's largest automaker, embezzled 63 billion won (now 67 million U.S. dollars) through fraudulent accounting to bribe politicians and officials.

Chung Mong-koo, chairman of Hyundai Motor Group, was sentenced to three years in jail for breach of trust and embezzling company funds by the Seoul Central District Court on Monday.

Chung was charged with embezzling 90 billion won (about 95.7 million U.S. dollars) in company funds and causing more than 210 billion won (21.27 million U.S. dollars) in losses to key affiliates of the automaker by forcing them to financially supportless stable affiliates, local media said.

"The accused used his status as chairman of Hyundai Motor Group to secretly set aside a huge amount of slush funds in a short period of time and use the money for his own purposes," said Judge Kim Dong-o of the Seoul Central District Court.

"This behavior hurts the soundness of corporate management and self-regulation," he added.

However, The court allowed Chung to remain on bail while his lawyers appeal, citing the need to ensure his right to defend himself in future trials and to minimize the ruling's influence on the national economy.

Chung, 68, was arrested in April last year on charges that he was involved in raising a huge slush fund through its affiliates to bribe politicians and government officials. After spending two months in jail, Chung was released on bail of 1 billion won (1 million U.S. dollars) in June.

Chung didn't give any comments after the ruling.

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