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Slush Fund Probe Targets Hyundai Chief

Posted April. 07, 2006 07:42,   


Authorities are investigating whether Chung Mong-koo, the chairman of Hyundai and Kia Automotive Group, ordered financial broker and Investus Global CEO Kim Jae-rok (46, in custody) to form a slush fund and intervene in the company’s management succession process.

Prosecutors confiscated a draft of a Hyundai Motors management succession plan, and a file on creating a slush fund during a January search of Kim’s private quarters and Investus Global office.

They plan to summon Chung and his only son, Eui-sun, president of Kia Motors, at a later date.

Prosecutors searched Chung Eui-son’s office, Hyundai and Kia Motors planning department office, and Hyundai Motors finance and economy department office. They found more files concerning the slush funds and succession plans.

Officials speculate that Kim drew up the draft and files, and forwarded them to Hyundai Motors.

The draft describes Chung Eui-sun’s strategies for securing stocks of subsidiary companies, the funds needed, and the means to create such funds.

Prosecutors have also confiscated documents on lobbying activities inside Cheong Wa Dae and the National Assembly to facilitate Hyundai Motors’ management succession process.

Meanwhile, according to an insider at Hyundai Motors, Chung is scheduled to return to Korea over the weekend.