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Transportation equipment industry

Hyundai Motor Group Executives Face Indictment for Bribery

Strategic Insights

— 1 min read

Prosecutors are intensifying their investigation into the Hyundai Motor Group's slush funds and corporate irregularities, with Chairman Chung Mong-koo and his son Eui-sun, president of Kia Motors Corp., expected to be questioned this weekend. The group is suspected of putting tens of billions of won into a secret fund used for bribing government officials, including those from the Financial Supervisory Service, the state-run Korea Development Bank, and Korea Asset Management Corp. The bribery allegedly involved writing off bad debts of affiliates Wia Corp. and Ajou Metals. Prosecutors have arrested a 57-year-old accounting firm head on charges of receiving 4.1 billion won to distribute as bribes.

Key Takeaways:

  • The Hyundai Motor Group is suspected of putting tens of billions of won into a secret fund used for bribing government officials.
  • The group is alleged to have bribed officials of the Financial Supervisory Service, the state-run Korea Development Bank, and Korea Asset Management Corp.
  • Prosecutors have arrested a 57-year-old accounting firm head on charges of receiving 4.1 billion won to distribute as bribes.
  • Hyundai Motor Group controls about 70 percent of the domestic car market, making it South Korea's second-largest conglomerate and the seventh-largest automobile company in the world.
  • The investigation is focusing on the group's accounting records, with two affiliates, Kasco and Bontec, being investigated for unusual write-downs of their debts.
  • Chairman Chung Mong-koo and his son Eui-sun, president of Kia Motors Corp., are expected to be questioned this weekend.

Statistics:

  • Tens of billions of won (exact amount not specified) was allegedly put into a secret fund by Hyundai Motor Group for bribing government officials.
  • 4.1 billion won (US$4.2 million) was obtained by the accounting firm head as a bribe for distributing and rewarding illegal activities.
  • Hyundai Motor Group controls about 70 percent of the domestic car market.
  • Hyundai Motor Group is South Korea's second-largest conglomerate and the seventh-largest automobile company in the world.
  • Two affiliates, Kasco and Bontec, are being investigated for unusual write-downs of their debts.

Sources:

  • "Seoul, April 16 (Yonhap) --"
  • "THROUGH ASIA PULSE"

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