South Korea has barred about 10 officials at its top car maker, Hyundai Motor, and its affiliates such as Kia, from leaving the country over a probe into suspected illegal political lobbying, a prosecution official told Reuters on Monday (27 March).
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Prosecutors also detained Lee Ju-eun, the chief executive of car shipper Glovis, a Hyundai affiliate, for questioning over allegations that he was involved in raising slush funds used to lobby politicians, reportedly added the official.
On Sunday, prosecutors raided offices of Hyundai Motor, Kia Motors and two other units, the report said.
“Glovis’ CEO was detained in accordance with a (detention) warrant,” the official from South Korea’s Supreme Prosecutors’ Office told Reuters, asking not to be identified.
“We are investigating him in connection to how much was raised in slush funds, how they were raised and where they were used. We also have to investigate if they were used for lobbying.”
A Glovis spokesman declined to comment to Reuters.
About 10 officials at Hyundai Motor and its related companies were ordered not to leave the country for questioning, the prosecution official told the news agency, declining to identify them.
Hyundai Motor spokesman Jake Jang told Reuters prosecutors searched the head offices of the four companies, including auto parts maker Hyundai Autonet and Glovis, on Sunday.
It was the first time prosecutors had raided headquarters of top conglomerates since an investigation into election campaign funding in 2003 and 2004, the Chosun Ilbo daily newspaper said, according to the report.
Hyundai Motor chairman Chung Mong-koo and his son, Chung Eui-sun, president of Kia, own a combined 60% of Glovis, Reuters noted.
The prosecution official reportedly said the investigation was linked to a probe into a local businessman alleged to have received funds from the companies for political lobbying.
The prosecution would decide whether to seek a full arrest warrant for the CEO of Glovis by Tuesday morning, the official told Reuters, which added that, in South Korea, prosecutors can detain people for questioning, before deciding whether to indict them.
Analysts told the news agency that reports of the investigation would undermine investor sentiment for the automotive group units in the short term, but was unlikely to have a major impact.
