South Korean prosecutors want a six-year jail term for the chairman of Hyundai Motor for alleged breach of trust and embezzling company funds.
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Reuters noted the prosecution request came as the automaker’s union readied further partial strike action over a bonus dispute, which is expected to put pressure on the company’s goal to more than double global revenue growth in 2007.
The news agency noted that Chung Mong-koo, 68, was arrested last April on allegations that Hyundai and its affiliates set up slush funds to pay for political favours. He was charged with breach of trust and embezzling company funds, and with incurring losses at group companies by forcing them to support weaker affiliates.
Chung was released on $1m bail in June after spending two months in jail, the news agency said, adding that the chairman admitted last year to having a role in setting up slush funds through affiliates of Hyundai.
“I admit to my guilt, to a certain extent,” he said in court, but repeatedly denied any knowledge of details of the slush funds, according to Reuters.
Chung reportedly apologised for his wrongdoing again on Tuesday and asked for a suspended sentence as his lawyers said the court should consider possible impact on the company and the whole economy if its chairman went to jail.
A court decision is due on 5 February, Reuters said, adding that analysts say Hyundai Motor could face a management vacuum if the chairman goes back to jail because Chung is known for his hands-on management style and has no designated successor.
