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Asia-Pacific

Hyundai Motor chairman appears to hear on arrest request

(AP)
Updated: 2006-04-28 09:36
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Hyundai Motor Co. Chairman Chung Mong-koo appeared in court Friday for a hearing on a request by prosecutors to arrest him on suspicion of embezzling company funds, a court official said.

Hyundai Motor chairman appears to hear on arrest request
Hyundai Motor group chairman Chung Mong-Koo walks to the Prosecutor General's office in Seoul, on April 24. South Korean prosecutors called for the arrest of the head of the Hyundai Motor group on charges of embezzling more than 100 million dollars from the country's top automaker. [AFP]

The Seoul District Court, which will question Chung before deciding whether to grant the warrant, began the hearing at 10 a.m. (0100 GMT), court official Na Kwang-kwon said. Prosecutors on Thursday sought the warrant to detain Chung on suspicion of embezzling company funds to create a slush fund, and causing damage to the company.

The 68-year-old head of South Korea's largest automaker entered the court in southern Seoul without being detected by reporters and photographers waiting outside.

Lee Eun, another court official, said a decision on the warrant was likely within the day.

Prosecutors suspect Chung of embezzling about 100 billion won (US$106 million; euro85 million) in company money to create a slush fund, and breach of trust for allegedly incurring about 300 billion won (US$320 million; euro255 million) in damages to the company, prosecution spokesman Kang Chan-woo said Thursday.

The investigation, which began last month, has highlighted concerns in South Korea about transparency at the country's ubiquitous family-run industrial conglomerates, or chaebol, where lax corporate governance has been a problem.

Prosecutors have raided Hyundai and three of its affiliates _ Kia Motors Corp., logistics unit Glovis Co. and auto-parts maker Hyundai Autonet _ and questioned key officials.

Investigators say officials embezzled money from affiliates to create the slush fund and used it, via at least two lobbyists, to seek favors from the government.

The lobbyists have been arrested on charges of receiving money from Hyundai in exchange for promises to help it win construction approvals and permits, and other business favors.

It is unclear if the lobbyists bribed government officials. In any case, it is illegal in South Korea to accept money in return for exercising influence.

Prosecutors said they planned to continue investigating Kia President Chung Eui-sun, though weren't planning to seek his arrest. He is the only son of the Hyundai chief.

Last week, Hyundai announced that the Chungs planned to donate 1 trillion won (US$1.1 billion; euro849 million) worth of personal assets to society, and that the company "apologizes" for causing worries to the public over the scandal.

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