Hyundai chief gets suspended jail term; asked to pay $895 million fine

06 September 2007

Mumbai: The Seoul High Court has quashed a three-year prison sentence imposed on Hyundai Automotive Group chairman Chung Mong-Koo over a multi-million dollar scam and instead imposed a suspended sentence and ordered him to undertake community service - including delivering speeches on the need for ethics in business.

Chung, 69, was also asked to pay an 840 billion won ($894.9 million) donation, previously pledged by the family, in lieu of the jail term.

The Hyundai Motor Group chief is now free to run the world''s sixth largest automaker. The decision not to jail South Korea''s second richest man eliminated concerns over a management vacuum at the company, which is facing a slowdown in overseas sales and increasing competition.

The ruling could, however, revive a long-held debate on South Korea''s powerful and controversial "chaebol" - the family-run conglomerates which opponents say have been given special treatment owing to their importance to Asia''s fourth-largest economy.

"Hyundai Motor is the top enterprise because of its ripple effect on the whole economy. The accused, Chung Mong-koo, is a symbol of Hyundai Motor and our country''s automobile industry," Lee Jae-hong, the presiding judge at the Seoul High Court, said while handing down the sentence.

"I did ask many people, including restaurant waiters, taxi drivers and reporters. The ordinary people leaned toward a suspended sentence," he said. "That means the accused should work hard."