The chairman of Hyundai Motor Company, Chung Mong-koo, is to face the verdict in his corruption trial on Monday.
A South Korean court has sentenced the head of Hyundai Motor Company, Chung Mong-koo, to three years in jail for embezzlement and breach of trust.
On trial since June 2006, Mr Chung is accused of raising 103.4bn won ($110m;£56m) illegally for personal use and for paying lobbyists.
Chung, 68, was accused of raising 103.4bn won ($110m;£56m) illegally for personal use and for paying lobbyists.
Earlier this year, South Korean prosecutors recommended that he spend six years in prison for embezzlement.
Earlier this year, South Korean prosecutors recommended that he spend six years in prison for embezzlement.
Analysts say if Mr Chung goes to prison it could harm both the country's car sector, and the wider economy.
Before the verdict, analysts said his conviction could harm South Korea's car sector, and the wider economy.
Suspended sentence
His imprisonment could "have a grave impact on the industry as well as the national economy", said Yong-Dae-in, an analyst with Goodmorning Shinhan Securities.
His imprisonment could "have a grave impact on the industry as well as the national economy," said Yong-Dae-in, an analyst with Goodmorning Shinhan Securities.
Hyundai - the country's largest car firm, and its affiliate Kia Motors, which is headed by Eui-sun, Mr Chung's son - represent some 70% of South Korea's vehicle exports, making it a vital part of the economy.
Hyundai - the country's largest car firm, and its affiliate Kia Motors, which is headed by Eui-sun, Mr Chung's son - represent some 70% of South Korea's vehicle exports, making it a vital part of the economy.
As a result, a suspended sentence is likely say analysts.
Lawyers for Mr Chung had argued that the chairman should be granted a suspended sentence because of the damage a jail term might mean to South Korea's economy.
Lawyers for Mr Chung have argued that the chairman should be granted a suspended sentence because of the damage a jail term might mean to South Korea's economy.
They also cited health reasons.
They also cite health reasons.
Chung previously asked for leniency and promised to improve the firm's corporate governance.
Mr Chung has previously asked for leniency and promised to improve the firm's corporate governance.
It was not immediately clear if Chung planned to appeal against the verdict.
The trial comes as Hyundai faces labour unrest as well as falling sales, as it faces tough competition from Japanese firms.
The strength of the South Korean won has made it harder to export vehicles, with 2006 seeing a 35% drop in net profits.
Improving corporate governance is one of the most important tasks South Korean companies are facing Kang Sung-goo, South Korea's secretary general, Transparency International
Following his arrest in April, Mr Chung was away from the firm for more than two months, during which time crucial decisions over pay and overseas plants remained unresolved.
The decision on Monday comes after another recent case, also in the Seoul District Court, gave the former head of Doosan group, Park Yong-Sung, a three year suspended sentence and a fine.
There has been reluctance to tackle corporate misdoings.
"Improving corporate governance is one of the most important tasks South Korean companies are facing" said Kang Sung-goo, the country's secretary general for Transparency International.
