Civil Suit

Hyundai Motor shareholders sue Chung for compensation

A group of Hyundai Motor Co. shareholders filed a civil suit against Chairman Chung Mong Koo, asking him to compensate South Korea's largest automaker following his conviction for breach of duty.

The shareholders, including Solidarity for Economic Reform, filed the suit in the Seoul Central District Court today, the Seoul-based group said in an e-mailed statement. The group is asking Chung and Vice Chairman Kim Dong Jin to pay 563.1 billion won ($538 million) to the company, the statement said.

The suit comes as Chung, South Korea's second-richest man, awaits a final sentence after being convicted of embezzlement and breach of fiduciary duty last year. The country's highest court last month overturned a lower court's suspension of Chung's prison term.

“South Korea has been showing too much leniency toward white-collar crime,” Lee Seung Hee, a senior researcher at the civic group, said by phone. “We're seeking the compensation for more transparent, responsible management.”

Hyundai Motor's Seoul-based spokesman Jake Jang declined to comment on the shareholders' suit.

Chung, 70, was convicted in February 2007 of embezzling almost 70 billion won. He was also found guilty of breach of duty by causing losses to the company and affiliates by helping weaker units and selling stock to himself and his son at below market prices.

(Published by Bloomberg 21, 2008)