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Hyundai CEO to pay $60M fine over losses to company

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Hyundai CEO to pay $60M fine over losses to company

02/08/2010, 3:26 PMBY MARK KLEIS

A south Korean court has found Hyundai CEO, Chung Mong-Koo, guilty of making decisions to protect managerial rights, despite knowing it could inflict damage to the company. The court has ordered that Chung Mong-Koo pay back a portion of the losses incurred by the company, totaling roughly $60 million.

A South Korean court in the Seoul district has brought a ruling against Hyundai’s CEO, stemming from a lawsuit filed by 14 minority shareholders and a non-governmental group known as Solidarity for Economic Reform, according to AFP. The lawsuit demanded top executives pay 563 billion won for the losses stemming from its risky share sales in 2001.

The lawsuit was originally filed in 2008 against both Chung and the vice president of parts supplier Hyundai Mobis, Kim Dong-Jin. The lawsuit was based around a series losses that Hyundai incurred due to the sales of shares of affiliates Hyundai Airspace and Aircraft Co. and Hyundai Hysco.

“The court has recognized the fact that Chung made Hyundai Motor participate in the share sales to prevent the threats to the Hyundai Group’s managerial rights, although it could inflict damage on his company,” Yonhap news agency quoted the judge as saying during the ruling.

In addition to Chung Mong-Koo being fined $60 million, vice president Kim was also ordered to pay an undisclosed, but reportedly very minor amount of the fine. The fines ordered by the court fall far short of the amount named in the lawsuit – which would have been closer to $480 million.

This isn’t the first time Chung Mong-Koo has landed himself in trouble – in 2007 he was found guilty of breach of trust and embezzling 90 billion won of Hyundai’s funds through fraudulent accounting practices.



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