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This page is graphically intense with long load times due to photos. However, the photos and narratives by the men who served at Osan Air Base makes the wait well worthwhile. The opinions expressed are those of the author and in no way represents any official statement of Osan AB or the USAF. 
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HYUNDAI SCANDAL(SEE HYUNDAI SCANDAL for details of Chung Mong-koo's plight in 2006.)BACKGROUND: Few gave Chung Mong Koo much of a chance when he took the helm of South Korea's largest carmaker, Hyundai Motor Co., in 1999. After all, in his 24 years running Hyundai's after-sales service unit, the bland son of founder Chung Ju Yung didn't express any grand vision for the auto business. Turns out, he had been trained to deliver what the company needed most: better quality. This year, Chung, 66, made good on his promise to boost Hyundai's quality to "Toyota (TM ) levels." J.D. Power & Associates' 2004 survey of initial quality -- which counts complaints in the first 90 days of ownership -- showed the Korean auto maker had virtually caught up with Toyota Motor Corp. And Hyundai's Sonata was the top-ranked car in the "entry midsize" category. In 2005, Hyundai started building a revamped Sonata for the U.S. market to challenge Toyota's popular Camry. The new Sonata and Tucson sport-utility vehicle were also key in efforts to expand in Europe, China, and smaller markets. (Source: Business Week.) In April 2006 the Hyundai Motor Company, under investigation in the possible bribery of government officials, said that the family of its chairman, Chung Mong Koo, would donate 1 trillion won or $1.06 billion in shares to show its contrition. Mr. Chung and his son, Chung Eui Sun, were to donate all 22.5 million shares of their shares in the Glovis Company, or 60 percent of the logistics unit, Hyundai's vice chairman, Lee Jeon Kap, said. ''We apologize for causing the public concern and for not taking our full social responsibility as a company that should have been a role model,'' Mr. Lee said. Donations and public apologies are typical ways of expressing contrition by Korean companies. (Source: NY Times.) In May 2006, Chung Mong Koo was charged with embezzling more than $100 million and causing far larger financial damage to companies under his control; is charged with misappropriating 130 billion won ($136 million) to set up slush fund that was apparently used to buy political influence; is also charged with breach of trust, accused of causing more than 400 billion won ($429 million) in damages to companies in Hyundai group The perennial question surrounding Korea's biggest family-owned companies: Is there a father-to-son succession in the works? Speculation about this at Hyundai was when Hyundai Motor group chairman Chung Mong-koo, 68, listed Glovis, the group's logistics business, on the public markets. The public offering reportedly gave Chung's only son, Eui-sun, 35, a 32% interest in Glovis worth $700 million--and enough cash to perhaps later increase his own stake in the world's fifth-largest automobile manufacturer. Might not be a bad investment: Hyundai Motor's share price climbed 50% in 2006. (Source: Forbes.com.) In 2006, he and his family were targeted by the Seoul Supreme Public Prosecutor's Office as part of an investigation into embezzeling 100 billion won ($106 million USD) from Hyundai to create slush funds. Despite a travel ban, Chung left South Korea in April 2006. Chung was arrested on 28 April 2006 on charges related to embezzlement and other corruption. He was convicted of embezzlement and breach of fiduciary duty on 5 February 2007 and sentenced to three years of prison. Chung plans to appeal the sentence and remains free on bail. Chung Mong-koo, had bond set at one billion won, or about $1 million. Reasons for letting him out range from concerns for the 68-year-old's health to concern over the South Korean economy while Hyundai flails around without a leader. Hyundai chief faces 6-year jail term (Jan 2007) Prosecutors demanded a six-year prison term against Hyundai Motor chairman Chung Mong-koo for embezzlement and other charges on 16 Jan 2007, adding to the woes of the largest South Korean automaker. Mr Chung, 68, has been on trial since June 2006 on charges of illegally raising a slush fund from affiliates from which authorities say he spent 69.3 billion won ($74 million) for private and other purposes, including payments to lobbyists for government favors. Chung had been questioned by investigators since March last year about charges that he masterminded a series of malpractices to transfer corporate wealth to his son, Eui-sun, the 37-year-old president of the group affiliate, Kia Motors. It is suspected that Hyundai Autonet, a component-maker under Hyundai Automotive, paid higher-than-market value for acquiring its machinery unit Bontech in February 2005, benefiting the younger Chung, who was the majority shareholder of the company. Bontech's stocks were valued at 233,500 won ($247) per share during the acquisition deal. However, in September of the same year, Eui-sun sold his 30 percent stake in Bontech to German high-tech company Siemens AG for just 95,000 won per share. The elder Chung is also suspected of forcing five group affiliates to participate in a rights offering of an aerospace machinery unit, which was to be liquidated after being absorbed by Korea Aerospace Industries in 1999, to relieve himself from joint liability.  Chung Mong-koo He was also charged with inflicting financial damage on affiliates through questionable deals and arrangements that allegedly protected or boosted the financial interests of him and his son, Eui-sun, who heads Kia Motors, the country’s second-largest carmaker. The younger Chung doesn’t face trial. “It’s unavoidable to seriously punish the defendants... because the crimes in this case are grave,” lead prosecutor Lee Dong-ryol said at the trial, which also included other company officials. Chung Mong-koo apologized and pledged to make Hyundai the world’s No 5 automaker if given the chance. Hyundai and affiliate Kia Motors combined currently rank sixth. “I’m sorry for causing trouble over this case,” he told the court. Mr Chung’s defence lawyers called for leniency and asked for a suspended sentence in light of their client’s health and the effects his conviction would have on Hyundai and the entire nation’s economy. Hyundai and Kia account for more than 70 percent of South Korea’s automobile exports. Autos account for about 10% of South Korea’s total exports. It was unclear how the judges at Seoul Central District Court would rule. But South Korean courts have often come under public criticism for being too lenient on business tycoons after they sentenced high-profile chief executives to suspended jail terms in similar corruption cases. (SITE NOTE: The courts have repeatedly allowed those who have embezzled millions of dollars to walk free because of their "service" to the country. There is something wrong with the judicial system that allows a double standard where a poor man in credit debt is forced to destitution and ultimately suicide, while a rich man is allowed to be fined so that he gets to keep the bulk of the funds embezzled and still walk free claiming that as a crook who cheated his company, he is essential to the operations. All that happened was that Chung Moo-koo has structured his family network so that his son and family have a stranglehold on their company -- but the relatives are also fighting for control. This is not healthy for the company -- and not healthy for Korean society.) The verdict and sentencing was scheduled February 5. Mr Chung has been out on bail since late June after two months of detention following his April arrest. The trial has cast a cloud over the company, which also is suffering from a row with its militant labor union that intensified this week with new strikes. (See Hyundai Strike (Jan 2007) for details of illegal union actions and Hyundai giving in to demands. Through 2006, Hyundai’s union has gone on strike every year but one since it was established in 1987. Public sentiment has turned against the union, with local media accusing union workers of selfishness at a time when their company is struggling with the strengthening Korean currency that hurts exporters. Hyundai Motor Co., South Korea's largest automaker, said on 25 Jan 2007 its fourth-quarter net profit tumbled 22 percent, hurt by a firmer local currency and lost production from labor strikes. Some analysts painted a pessimistic view of the automaker's near-term outlook, citing the won's steady rise against the U.S. dollar and the opaque management style of Hyundai Motor Chairman Chung Mong-koo.) Chung Mong-koo Gets Three Years (Feb 2007) Hyundai Automotive Group Chairman Chung Mong-koo was sentenced to three years in prison on 5 Feb for embezzling about 90 billion won ($96 million) in company funds and causing 210 billion won in loss to group affiliates through breach of trust. Chung, 68, was arrested last April after prosecutors claimed he was involved in a series of financial irregularities since 2002, including raising 69.3 billion won in slush funds through six group affiliates and using the money to unlawfully transfer corporate wealth to his family. After spending two months in jail, Chung was released on bail of 1 billion won in June. The Seoul Central District Court, which found Chung guilty on all four accounts presented by the prosecution, however, decided not to revoke the bail. This means that the Hyundai Automotive Chairman will not be detained throughout his court appeal. ``In respecting to the defendant’s right for legal defense and to reduce the impact on the economy, the court will not annul the earlier judgment to grant him bail,’’ said court judge Kim Dong-oh. Hyundai Automotive Vice Chairman Kim Dong-jin, who was indicted with Chung, was sentenced to two and a half years in prison and four years of probation over his involvement in creating the slush funds. Lee Chung-dae, the group’s top finance officer, and Kim Seung-nyon, head of the sales department, were both sentenced to three years of probation. (Source: Korea Times.) Emboldened by the country's democratization, prosecutors and the courts have recently been taking a harsher approach. Experts, for example, were surprised at Chung's sentencing, with many having expected he would get a suspended term. Still, there have been numerous cases of high level corporate executives convicted of shady dealings treated with leniency in the courts or ultimately getting special presidential pardons. In 2005, Chey Tae-won, CEO and chairman of South Korea's top oil refiner SK Corp. had the three-year prison term he received for accounting irregularities suspended on appeal to the Seoul High Court. Convicted Hyundai Motor executive Lee Chung-dae promoted to company president (Feb 2007) South Korea: Hyundai Motor Co. on 15 Feb announced the promotion to president of a top executive convicted this month for assisting Chairman Chung Mong-koo in embezzling company funds. The promotion of Chief Financial Officer Lee Jung-dae to become one of Hyundai's seven presidents was part of an annual reshuffle of executives in the Hyundai Motor Group. "The annual promotions in the Hyundai-Kia Automotive Group will focus on stabilizing global operations and reinforcing its ability to enhance management aimed at putting the customer first," Hyundai said in a statement announcing the changes. Lee, who will retain his position as CFO, is one of 250 executives at Hyundai Motor, Kia Motors Corp. and other group companies affected by the promotions, Jang said. Though convicted on Feb. 5 and handed a 2 1/2-year prison term, the 51-year-old Lee will remain free as long as he stays out of trouble for three years. On the same day, the Seoul District Court sentenced Chung to three years in prison for illegally raising a 103.4 billion won (US$111 million, €84.2 million) slush fund from affiliates and other wrongdoing. Chung, 68, is appealing the ruling and remains free and in charge of the world's sixth-largest automaker. Besides Lee, two other Hyundai executives also received suspended prison terms for assisting Chung. Corruption in South Korea, particularly in the country's ubiquitous family-run industrial conglomerates, known as chaebol, is widely seen as a legacy of decades of military-backed authoritarian rule, which ended in 1987. (Source: International Herald Tribune.) Hyundai chairman renews vow to donate $1.1B (May 2007) Hyundai Motor Chairman Chung Mong-koo, appealing an embezzlement conviction and prison sentence, on 22 May reaffirmed his promise to donate 1 trillion won ($1.1 billion) worth of personal assets to society. Chung, who made the pledge last year as part of a public apology and attempt to earn leniency amid a slush fund scandal, said the money will be donated to the public through an independent committee over seven years. The committee will be set up by end of this year, he said. Chung made the comments during questioning by his attorney at the Seoul High Court at his appeal hearing over a February conviction for embezzling company funds to set up a slush fund. He also answered questions about the donation plan from the presiding judge. The donated money will be used to build an opera house in Seoul and 12 other cultural complexes across the country, Chung told the court. Chung said he hopes some of the money will be used in projects that can help prevent global warming. Chung, one of South Korea's richest men, was sentenced to three years in jail for embezzling the equivalent of more than $100 million in company funds and breach of trust. He remains free during the appeal and continues to run the company, the world's sixth-largest automaker. Chung told the court he has already given 60 billion won ($64.5 million) in cash to a charity and another 60 billion won will be offered within a year. A fourth round of Chung's appeal hearing is scheduled for June 5. (Source: US Daily News.) Korea Deposit Insurance Corp. Files its First-ever Suit Against Executives (Jun 2007) In a related story, after the former chairman of Hyundai Group and several executives took out fraudulent loans they didn’t repay, several major banks did not try to recover the money because they feared the conglomerate would do less business with them, a government agency said yesterday. (SITE NOTE: At the time of the conviction, we noted that the fines did not even cover the amounts supposedly embezzled. We noted at the time that crime DOES pay.) So the Korea Deposit Insurance Corp. did something it’s never done. It filed suit itself to recover a total of 29.1 billion won ($31.4 million) in fraudulent loans made in 1998 and 1999, the state-owned agency said in a release. Korea Deposit Insurance Corp. said on 27 Jun that it will sue Hyundai Group’s Chairwoman Hyun Jeong-eun and former executives of Hyundai Engineering and Construction and Hynix Semiconductor. Both companies, which were Hyundai affiliates at the time, were suffering heavy losses. Hyun is the widow of former Hyundai Group Chairman Chung Mong-hun. As an inheritor, she is thus a defendant, the release said. Hyundai Group released a statement protesting the decision. “The late Chung Mong-hun did everything he could, including donating his own assets to Hyundai Engineering and Construction,” it said. “At that time, Chairwoman Hyun Jeong-eun was not in management.” Woo Byung-woo, head of the special non-performing loan investigation team at the deposit insurance corporation, said eight former Hyundai Engineering executives used false financial statements in 1998 to take out 27.6 billion won in loans they never repaid, and four Hynix Semiconductor executives did the same thing to take out 1.5 billion won in loans in 1999. The late Chung was listed as a defendant in both cases. Under Korean law, the state agency can file a suit to recover money if a financial institution refuses its request to do so. The Korea Deposit Insurance Corp. said it asked the financial institutions affected, including Shinhan Bank and SC Korea First Bank, to file for the compensation. However, the agency said the institutions would not do so because of their business relationships with Hyundai Group. The insurance corporation said it would continue to seek compensation against executives to recoup public funds if financial institutions reject its requests to file such lawsuits. (SITE NOTE: It is noteworthy that the Roh administration approved of the push to allow chaebols such as the Hyundai Group to own its own financial banks -- in direct opposition to the IMF reforms institution after the chaebols caused the "IMF Crisis" in 1997-1998 that brought the country to its knees by its cross-assurances on bad loans through its network of banks. The claims that the banks had sufficient transparency to prevent a reoccurrence by Roh and the Uri Party was used as the justification. It is noteworthy that BOTH the Uri and GNP apparently backed this move as the chaebols provide massive amounts of political funds needed for a presidential campaign.) In a similar case, the Seoul Central District Court ruled in 2005 in favor of three financial institutions, including Korea First Bank, after they filed a lawsuit against Chung Tae-soo, the chairman of the former Hanbo Group, and one of his sons. They had to repay 25 billion won in fraudulent loans. (Source: Joongang Ilbo.) Slap on wrist for Hyundai boss' billion dollar dodgy It was reported on 7 Sep that Hyundai chief Chung Mong-koo had his three-year jail sentence for fraud suspended by a South Korean appeals court, leaving him free to run the world's sixth largest auto maker. The decision not to jail South Korea's second-richest man eliminated concerns over a management vacuum at the company, which is facing a slowdown in overseas sales and increasing competition. (NOTE: A three-judge panel at the Seoul High Court suspended the sentence for five years, meaning that the 69-year-old head of the world's sixth-largest automaker will avoid prison as long as he keeps a clean record during that period. The Prosecution immediately filed an appeal over the suspended sentence.) But the ruling could also revive a long-held debate on South Korea's powerful and controversial "chaebol" - the family-run conglomerates which opponents say have been given special treatment owing to their importance to Asia's fourth-largest economy. "Hyundai Motor is the top enterprise because of its ripple effect on the whole economy. The accused, Chung Mong-koo, is a symbol of Hyundai Motor and our country's automobile industry," Lee Jae-hong, the presiding judge at the Seoul High Court, said while handing down the sentence."I did ask many people, including restaurant waiters, taxi drivers and reporters. The ordinary people leaned toward a suspended sentence," he said. "That means the accused should work hard." (SITE NOTE: Presiding Judge Lee Jae-hong told the packed courtroom that Hyundai Motor has great influence over the nation's 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." 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 restaurant employees." We wonder if the Prosecution will run an investigation on the the three judges bank accounts. Chung embezzled hundreds of millions and a few half-million dollar bribes are a drop in the bucket if he intended to do so. A suspended sentence sets him up also for a pardon in the next round of Presidential pardons.) Hyundai Motor shares rose as much as 2.2 per cent on the ruling and closed 0.6 per cent higher. The broader KOSPI ended up 1.2 per cent. Instead of a jail term, Chung was asked to pay an 840 billion won ($NZ1.29bn) donation, previously pledged by the family, to deliver speeches about transparent management and to write essays about governance to be published in domestic media. Although it suspended the term given in February by the Seoul Central District Court, the high court upheld the lower court's conviction of the chairman for breach of trust, embezzlement of company money and setting up slush funds. Investors had been concerned that uncertainties over Chung's legal battle could hamper Hyundai's expansion plans at home and abroad, even though brisk domestic sales and a smooth conclusion to this year's wage talks are brightening the outlook somewhat. Hyundai Motor Group alone accounts for about 7 per cent of South Korea's total exports and Chung is heavily involved in most decisions at the group. Hyundai ranks among the biggest chaebols in South Korea - the family groups that helped rebuild the economy after the 1950-53 Korean War but were partly blamed for the financial crisis of the late 1990s. Despite reforms brought in after the 1997-98 Asian financial crisis, some conglomerates are still run like family businesses, shifting money among group companies and using complex share ownership networks to control their businesses. (Source: NZ Herald and Money CNN.com.) List of Tycoons, Business leaders and Artists to Accompany Roh to Summit (Sep 2007) Hyundai Automotive Group Chairman Chung Mong-koo and 16 other business leaders were to accompany President Roh Moo-hyun during the second inter-Korean summit from Oct. 2-4. Chung Mong-koo was released from jail on 6 Sep after an appellate court suspended his prison term for embezzling company funds. (SITE NOTE: The Prosecution is appealing the decision. The judge said he took into consideration the opinions of the common people, but NGO groups were up in arms after the second tycoon was released for the same reasoning. The bottomline is that Chung is still under a cloud -- even with a suspended sentence as a convicted felon. However, he is invited to attend the summit with North Korea as a pillar of the business community. (UPDATE: The comments of business leaders of the summit of 2-4 Oct 2008 was that the North was on a shopping trip for free goodies without offering anything in return. Basically, the conditions for doing business in North Korea was less than ideal -- and the DPRK working group was not there to offer anything. Korea Herald on 6 Oct reported that the Hyundai Research Institute in a report issued estimated that inter-Korean business deals would generate up to $150 billion in long-term economic benefits. "The new joint economic projects will deliver North Korea a significant boost to its economy, while reducing the capital cost of unification for the South," the report stated. The report also said the DPRK can expect up to $138 billion worth of long-term economic benefits from the development of special economic districts and other necessary infrastructure investments. The package was to improve the economic conditions in North Korea, while reducing the capital cost of unification for the South. The GNP has already vowed to view economic packages with close scrutiny in the national assembly. Though Roh promised that he would not make any deals without the National Assemby approval, on 6 Oct he ordered his cabinet to map out a plan that the succeeding government cannot water down or scrap...meaning the GNP interference with the declaration which was to be the legacy of his presidency. Unfortunately, all the business leaders backed out of support for any future deals with the North.) U.S. Proxy Advisory Firm Calls for Hyundai Motor Chief to Resign (Mar 2008) Institutional Shareholder Services, a leading independent U.S. proxy advisory firm, said that Chung Mong-koo, chairman of Hyundai Motor Group, should step down, considering the seriousness of his crimes, like the raising of slush funds. The Wall Street Journal reported on Feb. 29 that the ISS recently released a publication to more than 1,600 institutional investors that although Hyundai's sales and profits have significantly increased since Chung took control, his accomplishments did not justify the criminal acts. ISS, a subsidiary of financial risk management analysis firm RiskMetrics Group, is a provider of financial risk management analytics. When Sovereign Global Investment threatened the management rights of SK Corp. and legendary corporate raider Carl Icahn attempted to acquire Korean Tobacco and Ginseng Company ("KT&G"), ISS supported the two foreign investment funds. Experts, however, predict that the firm's recommendation will have little impact on the general meeting of the auto company's shareholders to be held on Mar. 14. As of the end of 2007, Chairman Chung had a 37.27 percent stake, larger than the 30.54 percent held by foreign investors. Kim Hak-joo, head of research at Samsung Securities, said, "The establishment of Chung's slush fund is not news any more, and ISS is not an organization strong enough to bring together institutional investors." (Source: Donga Ilbo.) National pension fund to vote against Hyundai Motor chief (Mar 2008) South Korea's national pension fund said on 12 Mar that it has decided to vote Hyundai Motor Co. Chairman and Chief Executive Chung Mong-koo off the company's board in its annual shareholder meeting this week, because of his conviction for embezzlement and breach of trust. The decision by the National Pension Service, which owns a 4.56 percent stake in Hyundai Motor, is expected to add to pressure on the disgraced chairman, who will seek to be re-elected for another three-year term on the board on 14 Mar. "The fund's committee decided to vote against keeping Hyundai Motor Chairman Chung Mong-koo as the company director on March 14," said an official at the Ministry of Health, Welfare and Family Affairs. The ministry supervises the national pension fund, the nation's biggest institutional investor. It's the first time the pension fund has decided to vote against an owner of a family-run business conglomerate. Chung, who runs Hyundai Motor and its affiliate Kia Motors Corp., was sentenced by a lower court early last year to three years in prison on conviction of embezzling US$100 million in company funds. An appeals court later suspended the sentence for three years, allowing the 69-year-old chairman to run his business as usual, citing his importance to the economy. Early this month, ISS Governance Services, the New York-based investor-advisory group also called for investors to oust Chung from the board, saying his criminal record damaged Hyundai Motor. Together with Kia Motors, Hyundai Motor is the world's sixth-largest automaker by production. Separately, the pension fund said it would also vote Doosan Heavy Industries & Construction Chairman Park Yong-sung off the board of Doosan Infracore Co. The fund holds a 2.92 percent stake in Doosan Infracore. Park was sentenced to a three-year prison term in 2006 for embezzlement, but his term was suspended later for five years. (Source: Hankyoreh: Yonhap News.) AND THE WINNER...Chung Mong-koo retains board seat (Mar 2008) Hyundai Motor Co., the country's leading automaker, said 14 Mar that its chairman and chief executive officer was reelected to its board at a shareholders meeting earlier in the day despite a vote by South Korea's pension fund against him. Chung Mong-koo, 63, will have a board seat for another three-year term, according to the company. BUT...Chung Eui-sun Resigns as Co-CEO of Kia Motors (Mar 2008) The son of Hyundai Motor Co. Chairman Chung Mong-koo resigned on 21 Mar as one of three co-chief executive officers of Kia Motors Corp., ending an often-rocky three years at the helm of the nation's second-largest carmaker. Some analysts say the departure of Chung Eui-sun, 39, from the CEO job of Kia Motors is likely to weaken his position in the Hyundai-Kia automotive group. The junior Chung is widely expected to succeed his father within years. Top court sends back embezzlement case on Chung (Apr 2008) South Korea's top court on 11 Apr ordered a lower court to re-examine its ruling that Hyundai Motor chairman Chung Mong-koo give corporate lectures rather than doing community service involving physical labor for embezzlement of corporate funds. Chung was convicted last year by the Seoul High Court of embezzling over 90 billion won (US$92 million) of company money to create a slush fund, financially hurting affiliates by engineering a transfer of stocks to his son at lower-than-normal prices and conducting other business malpractices. The appellate court sentenced Chung to a suspended prison term, and ordered him to give speeches to business executives and write articles in the local media on "corporate transparency" while acting on his promise to donate 840 billion won (US$861 million) to social charities to indicate his regret. Prosecutors appealed, saying the ruling veers far from previous sentences involving community service that requires physical labor at charity organizations and other non-profit outfits. (SITE NOTE: This is our view that a poor man who defaults on his credit card debt has his house taken away, his furnishing sold and his family thrown on the streets. But if you're a rich man, you can pretend you're sick to get out of jail -- and then run your company as though you never left -- then promise to give money to charity and never give a cent -- and then get off by giving lectures and writing papers (which your underlings do for you). The whole process stinks!!! The ruling for Chung prompted public outcry and that was the reason the prosecutors appealed. The public is also getting fed up with the judges being in the pockets of the rich men.) "It is not clear what the ruling exactly means by speeches and articles," the Supreme Court said, adding the sentencing might also encroach upon the freedom of speech of the accused. The highest court ordered the lower court to deliver a "lawful and appropriate" sentence, saying, "When a ruling that orders community service is dismissed, so is a suspended jail term." The prosecution had sought six years' imprisonment for Chung, accusing him of raising slush funds to bribe politicians and government officials in return for business favors. But they stopped short of challenging the three-year jail term suspended by the appellate court for five years. (Source: Yonhap News.) I Will Keep My Promise to Donate 840Bil. Won: Hyundai-Kia Chairman (May 2008) Hyundai-Kia Automotive Group Chairman Chung Mong-koo, under indictment for embezzlement, announced that he would keep his promise to donate 840 billion won to the society, regardless of the results of his appeals trial. At the 20th Division of the Seoul High Court (led by Judge Gil Gi-bong), Chung said, “I’ve been in deep reflection about my behavior and I apologize to the Korean people. If I am given leniency, I’ll do my best to nurture Hyundai-Kia Automotive Group into one of the world’s best car companies.” However, prosecutors demanded six years imprisonment as they did in the first trial, saying, “Since he embezzled a significant sum of money and damaged the company’s subsidiaries, Chung should be punished accordingly.” Chung’s lawyer asked the court for leniency, saying, “The Supreme Court overturned the sentence and sent the case back to the High Court, since it concluded that the original sentence requiring community service was illegal. Therefore, the original judgment suspending Chung’s sentence should be maintained. While Chung has been on probation, he has successfully lured the World Expo to Yeosu, and sales and operating profit of Hyundai Motor Company in the first quarter have surged.” In response, the court asked Chung, “Are you fulfilling your promise to donate 840 billion won to society?” Chung’s lawyer responded, “Chung will donate cash and stocks amounting to 70 billion won each year over the next 12 years. He has already donated stocks amounting to 60 billion won to the Haevichi Cultural Foundation. The foundation will use the money at its discretion.” Chung was indicted on charges of embezzling 69.3 billion won and creating a slush fund amounting to 103.4 billion won. At his appeals trial, Chung was sentenced to three years in jail with a suspended sentence of five years. He was also ordered to keep his promise to donate 840 billion won as well as provide lectures. But, the Supreme Court sent the case back to the High Court since it judged that the required community service was illegal. Sentencing for Chung and the group’s vice chairman will be held at 2 p.m. on June 3. (Source: Donga Ilbo.) Shareholders Sue Hyundai Motor Chief for Billions (May 2008) Minority shareholders and civic groups led by Solidarity for Economic Reform filed a derivative suit at the Seoul Central District Court on 21 May against Hyundai Motor chairman Chung Mong-koo and vice chairman Kim Dong-jin for the damages of W563.1 billion they caused by mismanaging the company (US$1=W1,042). The group of shareholders allege that a heavy loss of W295 billion was incurred because shares of the Hyundai affiliate Glovis were taken over by Chung’s family instead of Hyundai Motor at the time of Glovis’ foundation in 2001. They also argue that the company’s decision to participate in increase of paid-in capital of a troubled affiliate, Hyundai Space and Aircraft Co., resulted in W96 billion of losses. (Source: Chosun Ilbo.) (SITE NOTE: We had been wondering the whole time of this incident why the minority shareholders had not taken such action against him. We have always been affronted by the fact that a person who embezzled millions of dollars got such a light sentence -- while others faced with bankruptcy go to jail.) Chung does Community Service (Jun 2008) Hyundai Motor Chairman Chung Mong-koo, right, babysits yesterday as part of his court-ordered community service at a center called Kkotongnae, “Flower Village,” run by a Roman Catholic organization in Eumseong, North Chungcheong. It is a Catholic welfare facility for the homeless, the disabled and abandoned babies. In 2007, Chung was found guilty of embezzlement and violating the public trust. His three-year sentence was suspended and he previous community service of giving speeches to business organizations was voided. Instead, he must do 300 hours of REAL community service. His photo of him feeding a baby was more of a photo-op than real community service, but the photo was widely publicized in the media. (SITE NOTE: But when is he going to pay the 840 billion won in money that he promised to give back?) One blogger commented on Marmot's Hole, "Must be a special chaebol welfare center since just this past December, Hanwha Group Chairman Kim Seung-youn was sent to Kkottongnae and worked there for 45 hours." |
