The CEO of Hyundai Motor was sentenced to a suspended jail term on Friday for political funding violations and negligence, the Seoul District Court reportedly said.
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Kim Dong-jin, also vice chairman of Hyundai Motor Group, which is South Korea’s third-largest conglomerate, was found guilty of playing a key role in raising a slush fund to support politicians in the 2002 presidential race, Reuters said, adding that he was sentenced to a suspended two-year jail term.
Hyundai Motor reportedly declined to comment on the ruling, but said the CEO would continue in his job after the conviction.
Reuters noted that Hyundai Motor, South Korea’s top carmaker, is one of many family run conglomerates, known as “chaebol”, that have been investigated over illegal campaign funding.
“The accused Kim Dong-jin raised slush funds through illegal means. Not only was the size of illegal political funding huge, but it was also carefully planned,” judge Choi Wan-joo reportedly told a courtroom packed with reporters and Hyundai officials.
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By GlobalData“But we took into account the fact that the funds raised illegally had been returned to the company and that the defendant has shown regret over his wrongdoings,” he added, according to Reuters.
A stony-faced Kim, dressed in a dark suit, walked out of the courtroom surrounded by his aides and declined to speak to reporters, the news agency said.
Reuters noted that South Korean president Roh Moo-hyun’s administration has mounted a drive to reform the chaebol and to break collusive links between big business and politicians – this is being closely watched by foreign investors, who partly blame the management practices for the relatively low value of South Korean stocks.
A debt-splurge by the chaebol was blamed by many for the 1997-98 financial crisis and the companies have since seen a fair amount of corporate restructuring, but analysts reportedly said reforms, particularly in their relationships with politicians, still have a long way to go.
