| Hyundai Motor chairman Chung
Mong-koo has been arrested after an investigation into alleged bribery
at the company.
The company’s expansion plans and publication of first quarter results
have already been delayed and shares in Hyundai have lost more than 13
per cent of their value since the beginning of the inquiry, closing 3
per cent lower at $89.32.
Hyundai and its affiliate, Kia, have had to postpone ceremonies at new
$1 billion-plus factories in Georgia, US, and Czech Republic.
Prosecutors had said previsouly they were seeking an arrest warrant after
claiming that Chung embezzled around about $105 million and incurred company
losses of about $315 million through illegal acts. The charges carry jail
terms of up to 10 years.
With Hyundai and Kia responsible for approaching 10 per cent of South
Korea’s total exports, there are concerns over the damage that the
investigations could do to the image of the country and its economy despite
the brand’s improving popularity and award-winning quality.
Hyundai: $1 billion donation to fight bribery
backlash
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