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Hyundai's boss gets three years Hyundai's boss gets three years
(about 5 hours 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. The chairman of Hyundai Motor Company, one of South Korea's biggest firms, has been sentenced 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 Mong-koo, 68, was accused of amassing a multi-million dollar slush fund for personal use and to pay lobbyists and politicians.
A spokesman for South Korea's top auto maker said the ruling was disappointing and 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.
The court allowed Chung to remain on bail while he fights the appeal.
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.
'Grave crimes''Grave crimes'
"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. Chung was accused of embezzling 103.4bn won ($110m;£56m) from company affiliates.
Some of the money was allegedly used to pay off politicians and government officials, and also help smooth the way for Chung's son to take control of the auto group.
This could have a big impact on Hyundai Motor - the impact on the Korean economy could be huge Kim Hyun-tae, Landmark Investment ManagementThis could have a big impact on Hyundai Motor - the impact on the Korean economy could be huge Kim Hyun-tae, Landmark Investment Management
"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.
He said Chung's action's were "clearly criminal".He said Chung's action's were "clearly criminal".
Prosecutors - who had sought a six-year sentence - had argued during the trial that Chung's crimes were "grave".Prosecutors - who had sought a six-year sentence - had argued during the trial that Chung's crimes were "grave".
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.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'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.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.He previously asked for leniency and promised to improve the firm's corporate governance.
Hyundai Motor Company said it would appeal.Hyundai Motor Company said it would appeal.
"We are greatly disappointed by the court ruling today," company spokesman Jake Jang said."We are greatly disappointed by the court ruling today," company spokesman Jake Jang said.
Shares tumbleShares tumble
The trial has been closely watched in South Korea, where it has been seen as a test of the court's commitment to tackle corporate corruption, the BBC's Charles Scanlon in Seoul says.
In the past the courts have treated similar cases with great leniency, but there has been growing pressure from the government and the public to impose stiffer penalties, he adds.
Before the ruling, experts said the conviction could harm South Korea's car sector.Before the ruling, experts said the conviction could harm South Korea's car sector.
Hyundai has faced worker unrestHyundai 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.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.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.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.