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Hyundai's boss gets three years Hyundai's boss gets three years
(about 1 hour later)
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.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.
Chung, 68, was 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.
A spokesman for the company said it was disappointed in the verdict, adding that an appeal would be filed. A spokesman for South Korea's top auto maker said the ruling was disappointing and that an appeal would be filed.
Before the verdict, analysts said the conviction could harm South Korea's car sector and the wider economy.Before the verdict, analysts said the conviction could harm South Korea's car sector and the wider economy.
Chung's 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. 'Grave crimes'
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. "The court decided a strict execution of law is necessary to eradicate illegal and anti-market practices in the past and help South Korea build a more advanced economy," Kim Dong-oh, presiding judge at the Seoul court, said.
Earlier this year, South Korean prosecutors recommended that he spend six years in prison for embezzlement. This could have a big impact on Hyundai Motor - the impact on the Korean economy could be huge Kim Hyun-tae, Landmark Investment Management
But 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. He said Chung's action's were "clearly criminal".
They also cited health reasons. Prosecutors - who had sought a six-year sentence - had argued during the trial that Chung's crimes were "grave".
Chung previously asked for leniency and promised to improve the firm's corporate governance. But Judge Kim said the lesser sentence was given taking into account Chung's "big contributions to the development of the country's economy" and also his involvement in charity.
Chung's lawyers 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. They had also cited health reasons.
Chung looked grim as the verdict was read and later walked silently from the courtroom.
He previously asked for leniency and promised to improve the firm's corporate governance.
Hyundai Motor Company said it would appeal.
"We are greatly disappointed by the court ruling today," company spokesman Jake Jang said.
Shares tumble
Before the ruling, experts said the conviction could harm South Korea's car sector.
Hyundai has faced worker unrest
The 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.
Shares in Hyundai Motor Company were down 2.44% after the verdict, Reuters news agency reported.
Hyundai - 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.