Hyundai Motor Co. chairman jailed in financial scandal

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREOregon Ducks football players get stuck on Disney ride during Rose Bowl eventChung emerged from the Supreme Prosecutors’ Office in Seoul after his arrest, before being taken by car to the Seoul Detention Center, just outside the city. He made no comment. Vice Chairman and Chief Executive Kim Dong-jin was assuming full responsibility and operational control for Hyundai Motor, “a duty he shared with Chairman Chung Mong-koo,” company spokesman Oles Gadacz said after the arrest warrant was issued. “All local and overseas manufacturing, sales, marketing and R&D (research and development) operations are unaffected by today’s development, and will continue normal operations,” he said. Hyundai has delayed its first-quarter earnings announcement as well as a formal signing ceremony for the Czech plant as a result of the probe, while Kia has delayed a groundbreaking ceremony for its U.S. plant. Auto industry analysts in recent days have said that while Hyundai could suffer some short-term distractions because of the investigation, the long-term impact was unlikely to be large given the company’s strong sales. Seoul District Court Judge Lee Jong-seok said he had decided to issue the warrant after deliberating all day Friday because of the “heavy” nature of the allegations. Under South Korean law, prosecutors can detain suspects for up to 20 days after arrest before their indictment. “The suspect is denying most of the charges and it is feared he could destroy evidence,” Lee said. Prosecutors said they would continue to investigate Kia President Chung Eui-sun, Chung’s only son, but did not plan to seek his detention.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! SEOUL, South Korea – The chairman of Hyundai Motor Co. was arrested and jailed Friday in an embezzlement and slush fund scandal engulfing South Korea’s largest automaker. Chairman Chung Mong-koo’s arrest came as Hyundai and its affiliate Kia Motors Corp. are aggressively expanding operations to achieve their goal of becoming the world’s sixth-largest automaker by 2010. Hyundai said it had put a top executive in charge and all operations were proceeding normally. Chung, 68, was accused of embezzling about $106 million in company money to create the slush fund, and of breach of trust for allegedly incurring about $320 million in damages to the company, prosecutors said. The investigation, which began last month, has highlighted concerns about transparency at South Korea’s ubiquitous family-run industrial conglomerates, or chaebol, known for scandals and lax corporate governance. last_img

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