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article imageHyundai chief guilty of embezzlement gets 3 Years

By Carolyn E. Price     Feb 4, 2007 in Business
Chairman of Hyundai remains out on bail while appealing verdict. He already received a lesser sentence due to his "contributions to the development of the country's economy" and "involvement in charity to atone for his actions".
The Chairman of Hyundai Motor Co., Chung Mong-koo, was convicted of embezzlement and other charges today and sentenced to three years in prison. The conviction stems from a slush fund scandal that has weighed down South Korea's largest automaker.
Prosecutors have been taking a hard line on corruption in South Korea and last month they were looking for a six-year jail term, calling Mr. Chung's alleged crimes 'grave'.”
Judge Kim Dong-oh said the lesser sentence was justified because of Mr. Chung's contributions to the development of the country's economy and he noted Mr. Chung's involvement in charity to atone for his actions. The judge said that Mr. Chung's actions were 'clearly criminal acts'.”
Mr. Chung has apologized for his actions and his lawyers argued he be given a suspended sentence --—meaning he would not actually serve any prison time unless he was involved in other crimes. Mr. Chung will appeal the verdict, Hyundai Motor said. "We are greatly disappointed by the court's ruling and it is our intention to file an appeal," company spokesman Oles Gadacz said.
Mr. Chung remains free on bail and doesn't face immediate arrest. He was absent from work for more than two months after being jailed following his April arrest and entering a hospital for a health exam. He was granted bail in June and returned to work in July.
Mr. Chung illegally created a slush fund from affiliates. He spent 69.3 billion won ($74 million) for private and other purposes, including payments to lobbyists for government favors.
He was also convicted for inflicting financial damage on affiliates "through questionable deals and arrangements that allegedly protected or boosted the financial interests of him and his son, Eui-sun, who heads Kia Motors Corp., the country’s second-largest carmaker". Mr. Chung's son does not face trial.
The senior Chung had pleaded for the courts leniency, and apologized in court for "causing trouble over this case". He pledged to make Hyundai the world's No. 5 automaker if given the chance.
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