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Last Updated: Tuesday, 28 March 2006, 15:50 GMT 16:50 UK
Hyundai chief faces fraud probe
South Korean Hyundai Sonata
Hyundai Motor is South Korea's top carmaker
Prosecutors have arrested the chief executive of carmaker Hyundai Motor's logistics subsidiary, Glovis, on corruption charges.

Lee Ju-eun is suspected of embezzling 7bn won ($6.73m; 3.85m) in company money for use in lobbying politicians.

Prosecutors say the investigation is linked to the arrest of businessman Kim Jae-rok on illegal lobbying charges.

Hyundai Motor is suspected of paying Mr Kim for his influence with politicians and local government officials.

Prosecutors have also banned a number of top Hyundai Motor officials from leaving the country.

Hyundai Motor shares rose 2.5% on Tuesday after falling 2.6% the day before. Glovis shares fell a further 1.9% on Tuesday after slumping 15% on Monday.

Hyundai was featured in a corruption investigation in 2003, when prosecutors examined allegations of illegal election campaign financing.

Vice-chairman Kim Dong Jin was given a two-year suspended sentence and later pardoned.


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