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Convicted Hyundai exec gets promoted


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by KELLY OLSEN -- Associated Press posted February 15, 2007

SEOUL, South Korea -- Hyundai Motor Co. on Thursday announced the promotion to president of a top executive convicted this month for assisting Chairman Chung Mong-koo in embezzling company funds.

The promotion of Chief Financial Officer Lee Jung-dae to become one of Hyundai's seven presidents was part of an annual reshuffle of executives in the Hyundai Motor Group, said Hyundai Motor spokesman Jake Jang.

"The annual promotions in the Hyundai-Kia Automotive Group will focus on stabilizing global operations and reinforcing its ability to enhance management aimed at putting the customer first," Hyundai said in a statement announcing the changes.

Lee, who will retain his position as CFO, is one of 250 executives at Hyundai Motor, Kia Motors Corp. and other group companies affected by the promotions, Jang said.

Though convicted on Feb. 5 and handed a 2 1/2-year prison term, the 51-year-old Lee will remain free as long as he stays out of trouble for three years.

On the same day, the Seoul District Court sentenced Chung to three years in prison for illegally raising a 103.4 billion won ($111 million) slush fund from affiliates and other wrongdoing.

Chung, 68, is appealing the ruling and remains free and in charge of the world's sixth-largest automaker.

Besides Lee, two other Hyundai executives also received suspended prison terms for assisting Chung.

Corruption in South Korea, particularly in the country's ubiquitous family-run industrial conglomerates, known as chaebol, is widely seen as a legacy of decades of military-backed authoritarian rule, which ended in 1987.

Emboldened by the country's democratization, prosecutors and the courts have recently been taking a harsher approach. Experts, for example, were surprised at Chung's sentencing, with many having expected he would get a suspended term.

Still, there have been numerous cases of high level corporate executives convicted of shady dealings treated with leniency in the courts or ultimately getting special presidential pardons.

In 2005, Chey Tae-won, CEO and chairman of South Korea's top oil refiner SK Corp. had the three-year prison term he received for accounting irregularities suspended on appeal to the Seoul High Court.

Earlier this month Park Yong-sung, former chairman of the Doosan Group, South Korea's oldest family-run conglomerate, was one of 434 politicians and business executives to receive a special amnesty from President Roh Moo-hyun.

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