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Last Updated: Tuesday, 16 May 2006, 09:43 GMT 10:43 UK
Hyundai chairman Chung indicted
Chung Mong-Koo
Analysts said Mr Chung's problems will have a limited effect on Hyundai
South Korean prosecutors have indicted the chairman of carmaker Hyundai Motor for his alleged role in a bribery and embezzlement scandal.

Chung Mong-Koo was arrested at the end of April and has been accused of creating slush funds to pay politicians and officials for business favours.

He also is accused of transferring funds and shifting corporate controls to his son, Chung Eui-Sun.

Mr Chung, 68, denies the charges that can carry jail sentences of up to life.

"Chairman Chung Mong-koo has been indicted today," said Chae Dong-wook of the Supreme Prosecutors' Office, adding that Mr Chung is accused of embezzling 103.4bn won (52m; $109m) in company funds.

He also has been charged with raising about 130bn won of slush funds since 2001.

Broadening out

Hyundai is South Korea's biggest carmaker and the world's seventh, and also owns the Kia brand.

Prosecutors also plan to indict his son, Chung Eui-sun, who is president of Kia, and other company employees, Mr Chae said.

Two lobbyists were arrested in earlier this year on suspicion of receiving money from the company.

Hyundai declined to comment on the case, while analysts said it would have a limited impact on the firm's business.

In April, Hyundai made a public apology and said it Mr Chung and his son would set aside assets worth 1 trillion won.

The firm said the two men would donate their 60% stake in logistics subsidiary Glovis - which has been at the centre of the investigation - to charity.

Korean firm Samsung pursued a similar course of action in February, donating $800m in assets to a public fund after being embroiled in a number of scandals.


SEE ALSO:
Profits down at troubled Hyundai
04 May 06 |  Business
Hyundai boss arrested in S Korea
28 Apr 06 |  Business
Prosecutors seek Hyundai arrest
27 Apr 06 |  Business
Hyundai chief faces prosecutors
24 Apr 06 |  Business
Hyundai apologises amid scandal
19 Apr 06 |  Business
Hyundai chief faces fraud probe
28 Mar 06 |  Business


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