Prosecutors have raided the office of a major accounting firm in Seoul in search for further clues of financial irregularities at Hyundai Automotive Group, speeding up the probe into the slush fund scandal, the Korea Times reported.
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The paper said the investigation could disturb the group’s scheme for a father-to-son transfer of management control and wealth, as some senior executives could possibly face criminal charges.
Prosecutors plan to summon Hyundai Automotive chairman Chung Mong-koo and his son Eui-sun, president of affiliate Kia Motors, next week.
The paper said investigators at the supreme prosecutors’ office raided the headquarters of Samil PricewaterhouseCoopers in Yongsan, central Seoul after obtaining a search warrant.
Samil, one of the country’s largest accounting firms, manages the audit of several Hyundai Automotive affiliates.
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By GlobalDataProsecutors reportedly believe that Hyundai Automotive executives used some of its affiliates, including delivery service unit Glovis and component-maker Hyundai Autonet, to arrange a series of malpractices to increase the Chung family’s share of corporate wealth.
There are also allegations that group affiliates also involved in creating secret funds to bribe politicians and bureaucrats in lobbying for business favours.
Prosecutors reportedly recovered financial records and computers containing data on Hyundai Autonet.
Prosecutors also plan to summon Hyundai Autonet chief executive Joo Young-sub and former chief executive Lee Il-jang in the following days, the paper said.
The Korea Times said the raid on Samil indicated that investigators are taking a closer look at allegations that chairman Chung illegally transferred corporate wealth to the founding family.
According to the prosecution, Hyundai Autonet allegecxdly paid a higher-than-market value for absorbing its current machinery unit Bontech in February, benefiting the younger Chung who was the majority shareholder of the company. Samil was the lead manager of the acquisition deal.
The accounting firm evaluated Bontech’s stocks at 233,500 won ($244) per share when the company reached an agreement for it acquisition to Hyundai Autonet in November last year. However, in September of the same year, the Kia Motors president sold a 30% stake in Bontech to German high-tech company Siemens at 95,000 won per share.
Samil provided audit and assurance services to several of Hyundai Automotive affiliates, including machinery units Bontech and Wia. Prosecutors are questioning executives from a number of corporate restructuring companies, which they believe helped Hyundai Automotive acquire Bontech and Wia at below-market prices and, in the process, increased the Chung family’s share of corporate wealth, the Korea Times said.
