Hyundai Motor chairman ordered to pay 70 bln won for unfair share sales

By Kim Eun-jung
SEOUL, Feb. 8 (Yonhap) -- A Seoul court on Monday ordered Hyundai Motor Chairman
Chung Mong-koo to pay 70 billion won (US$59.7 million) in compensation to his own
company for inflicting damage on the top South Korean automaker with his decision
to participate in risky share sales.

A group of 14 minority shareholders and the NGO Solidarity for Economic Reform
filed a suit in 2008 against Chung and Kim Dong-jin, vice president of Hyundai
Mobis, claiming the top executives should pay 563 billion won for the losses the
company suffered in 2001 from its participation in highly risky share sales of
its affiliates -- Hyundai Airspace and Aircraft Co. and Hyundai Hysco.
They filed the suit after Hyundai Motor rejected their request that the company
seek compensation from its chairman.
"The court has recognized the fact that Chung made Hyundai Motor participate in
the share sales to prevent the threats to the Hyundai Group's managerial rights,
although it could inflict damage on his company," the Seoul Central District
Court said in a ruling.
"This is a case that reveals the problem of family-run management that focuses on
the interests of major stockholders and the executives of Hyundai Motor."
The court initially estimated damages at 140 billion won, but slashed the amount
in half, considering the possibilities of making profits from the investment and
circumstances following the 1997 Asian financial crisis.
The 72-year old tycoon was sentenced to three years in jail by a lower court in
February 2007 for embezzling 90 billion won (US$76.7 million) in company funds by
falsifying company books to set up slush funds and causing damages to Hyundai
affiliates. An appellate court later suspended his prison sentence and ordered
him to serve community service.
ejkim@yna.co.kr
(END)

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