SEOUL, South Korea (AP) _ An appeals court suspended a three-year
prison sentence for Hyundai Motor Co. chairman Chung Mong-koo on
Thursday, saying the tycoon is too important to South Korea's
economy to go to jail for embezzlement.
A three-judge panel at the Seoul High Court suspended the
sentence for five years, meaning that the 69-year-old head of the
South Korea's biggest automaker will avoid prison as long as he
keeps a clean record during that period.
A lower court had sentenced Chung in February to three years for
embezzling more than US$100 million from the company to set up a
Prosecutors say the fund was used to pay lobbyists to gain
government favours and for personal use.
Presiding Judge Lee Jae-hong told the packed courtroom that
Hyundai Motor has great influence over the South Korean economy and
Chung, its hands-on leader, is the symbol of the company.
``I am also a citizen of the Republic of Korea,'' Lee said. ``I
was unwilling to engage in a gamble that would put the nation's
economy at risk.''
Chung, free on bail after spending two months in jail after his
arrest in April last year, has been actively running the company,
which ranks as the sixth-largest automaker in the world and has
ambitions to become the fifth-largest by 2010.
Lee said he struggled with the decision, originally set for July
10, and postponed it twice, saying the court needed more time. He
said he sought the views of various people, including other judges,
prosecutors, lawyers, journalists and ``even taxi drivers and
In his appeal, Chung asked the court to be allowed to avoid
prison to devote his energies to South Korea's biggest automaker to
contribute to the country's economy.
Prosecutors sought a six-year prison term, saying the original
decision was not harsh enough for the crime.
The court also ordered Chung to fulfil a promise he made last
year to donate one trillion won (US$1.1 billion) of his personal
assets to society and told him to do community service.
It was not immediately clear whether prosecutors planned to
appeal to the Supreme Court. A lawyer for Chung said earlier
Thursday that the top court only hears cases involving guilt or
innocence, suggesting that an appeal regarding the sentencing would
Kim Kyung-soo, a spokesman for the Supreme Public Prosecutors'
Office, said Chung's conviction stands.
``It's not that he was found innocent,'' Kim said. ``Therefore,
it is not appropriate for us to comment on the weight of the
But Park Wan-gi, an activist with the Citizens' Coalition for
Economic Justice, denounced the ruling, saying it reinforced the
perception that the rich can avoid jail.
In a similar case, the Seoul High Court in 2005 suspended a
three-year prison term for accounting irregularities handed to Chey
Tae-won, CEO and chairman of South Korea's leading oil refiner, SK
Corp., now SK Energy.
Chung has pushed Hyundai Motor to expand aggressively overseas,
building factories in China, India, Turkey and the United States,
with another one currently under construction in the Czech Republic.
Hyundai Motor affiliate Kia Motors Corp. has done the same,
manufacturing cars in China and Slovakia and building another plant
in the U.S. state of Georgia, near Hyundai Motor's factory in
Last year, Hyundai and Kia accounted for about 72 per cent of
South Korea's automobile exports. Autos account for 13 per cent of
the country's total exports.
Hyundai welcomed the decision.
``We can now devote our full energies to addressing the numerous
challenges that face us and building a global brand,'' it said in a
Analysts say Hyundai faces problems including softer sales in the
United States and China and further mending troubled relations with
its strike-prone labour union.
A new wage deal Hyundai struck with its unionized workers this
week was a positive development but ``more work needs to be done to
be able to wipe rocky labour-management relations off Hyundai's list
of risk factors,'' said Chung Sung-yob, an analyst at Daiwa
The deal, if approval by the union rank-and-file, would mark the
first time in a decade that Hyundai has averted a strike over annual