Hyundai apologises amid scandal

The firm, which is being investigated by prosecutors over claims of illegal political lobbying, said it would fully co-operate with the inquiry.

Hyundai said its chairman Chung Mong-Koo and his son would set aside assets worth 1 trillion won ($1bn).

"We bow to the people and apologise," the firm said in a statement.

Corporate penance

Prosecutors are investigating claims that Hyundai operated a multi-million dollar slush fund to bribe government officials.

Two lobbyists have been arrested on suspicion of receiving money from the car company, although it is unclear whether they actually sought to pay government officials.

"The Hyndai Motor Group failed to meet its social obligations and caused concern to the people"
Hyundai

Investigators have questioned several company bosses and, according to media reports, may soon interview both Mr Chung and his son Chung Eui-Sun, president of subsidiary Kia Motors.

In an act of public penance and to restore confidence in the firm's activities, Hyundai said Mr Chung and his son would donate their 60% stake in Glovis, another subsidiary, to charity.

Glovis, a logistics unit, has been at the centre of the investigation.

"The Hyundai Motor Group, which should have set an example for society, failed to meet its social obligations and caused concern to the people," the firm said.

"The Hyundai Motor staff humbly accept the reproaches from the people. We will faithfully carry out our social obligations, keep to ethical standards and establish a transparent management system."

Hyundai shares rallied after the disclosure, with investors believing the move may result in a more transparent company structure.

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.

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