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Hyundai Chairman, Son Face Prosecution

Posted April. 18, 2006 03:01,   


The prosecution has made public that they plan to prosecute Hyundai-Kia Automotive group chairman Chung Mong-koo and his only son, Chung Eui-sun, the president of Kia Motors.

How serious a punishment will they get? Will both of them be put in jail? Or will they be indicted without detention? How likely is it that only one of them will get arrested? These questions are the biggest concerns of this investigation at the moment.

The Prosecutor General’s office will summon them as suspects and investigate them when Chairman Chung returns to Korea from a visit to China for three days on April 19, and will decide what kind of charges will be filed against them at the end of this month. Chung departed for China on April 17.

The prosecution says that despite their denial of the charges, there is no problem in prosecuting Chung and his son-

When asked if the plan to prosecute them could change depending on how actively Chung and his son participate in the investigation, Chae Dong-wook, an investigation planning officer of the Prosecutor General’s office said, “Not exactly.”

This means that the prosecution has already secured material evidence and statements made by relevant people which could prove their embezzlement charges in their investigation. The prosecution is showing confidence that there is no problem in punishing them even if they deny their charges when they are summoned to the prosecutor’s office.

Who will be arrested?-

When asked if both of them could be prosecuted at the same time, Chae said he would try to produce the most reasonable conclusion.

The severity of prosecuting Chung and his son could be decided in three ways; arresting both of them; arresting them without detention; and arresting only one of them.

The first two options are less likely. Their charges, which have been revealed until now, are too serious to arrest them without detention. It is being disclosed that both of them engaged themselves in amassing and using tens of billions of won in slush funds.

Even so, it is burdensome for the prosecution to arrest both of them. There has been no precedence of the prosecution arresting a father and his son both. Therefore, it is highly likely for the prosecution to issue an arrest warrant for only one of them. Then, who will it be?

Considering the current state of the investigation, Chung’s charges seem much more severe. The investigation has shown that Chung took the initiative in collecting slush funds and handling the issues of handing over management rights. But it is also hard to jump to a conclusion that the prosecution decided to arrest Chung only because his charges are graver. First of all, he is old (69 years old). And his arrest could lead to a vacuum of Hyundai Motor’s management and diminished international creditworthiness, which could have a bad influence on the national economy. All of those factors lay a burden on the prosecution.

A Hyundai official said, “If the situation deteriorates to the extent that Chairman Chung cannot maintain his office, the group may be put into a coma.

Due to this, some in and out of the prosecution speculate that President Chung would be arrested in the end.

Tae-Hoon Lee Sung-Won Joo jefflee@donga.com swon@donga.com