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Officials Begin Hyundai Lobbying Probe

Posted April. 14, 2006 03:16,   


Prosecutors began an investigation into allegations that the Hyundai Kia Automotive Group lobbied politics and bureaucrats via the president of an accounting firm in the process of writing off the debt of the group’s affiliates.

The Supreme Prosecutors’ Office arrested Kim Dong-hun, the 57-year-old former president of Ahn Kwon & Co., yesterday on charges of influence peddling.

According to the prosecutors’ office, Kim allegedly received 4.16 billion won over 14 times from financial executives of Hyundai Motor Company and Wia who asked him to lobby officials at national banks, government invested companies and the Financial Supervisory Service to reschedule the 230 billion won debt of A-Ju Metal, which supplies parts for Kia Motors, and Wia, a Kia affiliate.

The prosecution believes that the money Kim received from executives of the Hyundai Motor Company and Wia is part of a slush fund created by Hyundai Automotive Group.

It also confirmed that Kim helped cancel 55 billion won of the two companies’ debt, and obtained a clue that he lobbied politicians and bureaucrats in the process.

It said that, if it is confirmed that Kim lobbied officials at financial organizations, apart from politicians and bureaucrats, he will also be charged with influence peddling.

It said that it allowed Chung Mong-koo, the chairman of the Hyundai Automotive Group, to go on an overseas business trip. The chairman reportedly asked whether he could go to China to participate in the groundbreaking ceremony of the second Hyundai plant in Beijing from April 17 to 19.

Chae Dong-wook, an investigation planning official at the Supreme Prosecutors’ Office, said, “Chung publicly promised to accept investigation when he came back to Korea after his business trip to the U.S. The prosecution allowed him to go on an overseas business trip to forestall the group’s international credit standing from going down.”