Hyundai group founder jailed: 42m pounds of company funds diverted to presidential election campaign

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The Independent Online
SEOUL (AP, Reuter) - The founder and honorary chairman of the Hyundai group was yesterday sentenced to three years in prison on charges of diverting company funds to his unsuccessful presidential campaign in 1992.

Chung Ju Yung, 78, will remain free on bail pending appeals through the Supreme Court. He had not been detained during the trial and was free to travel internationally.

Chung was found guilty of illegally diverting the equivalent of pounds 42m from Hyundai to finance his election campaign. The prosecution had demanded a seven-year sentence.

Senior Judge Yang Sam Sung said he did not suspend the sentence because 'the accused refused to show repentance or acknowledge his guilt, even throughout the trial'.

Some 150 Hyundai officials and family members packed the courtroom as Judge Yang read from a 31-page decision.

Sighs and moans broke out when the sentence was read. Hyundai officials showed surprise at the prison term.

'We expected that the sentence would be suspended considering all that the honorary chairman did for the national economy,' one Hyundai official said.

Chung, dressed in a blue suit and looking tired, remained quiet and showed no reaction to the sentence. He refused to answer questions after the court adjourned.

Chung finished a distant third in last year's presidential election despite an aggressive campaign against the winner, Kim Young Sam.

Chung went into politics in 1992 by founding a maverick opposition party, promising to revitalise the sluggish economy. After his inauguration Mr Kim demanded strict punishment for election law violators and launched an anti-corruption campaign.

Some 3,000 politicians, businessmen and public employees have been imprisoned, fired or reprimanded in the campaign.

Chung retired from politics shortly after the election and stopped funding his party. He evicted the party headquarters from his Hyundai building.

Hyundai is South Korea's second-largest conglomerate, with pounds 27bn of sales in 1992. It produces cars and other industrial goods, including ships and semiconductors.

Chung was born in poverty in what is now North Korea in 1915 and earned his first wage packet as a rice delivery boy. His first ventures were a lorry firm and car repair company in the waning days of Japan's 1910-45 occupation of Korea.

He founded Hyundai Engineering shortly after the Second World War. It was eventually to blossom into an empire, manufacturing everything from supertankers to microchips, and South Korea's second-biggest exporter and earner of foreign currency.

Chung stood down last year as chairman of the group in favour of his younger brother, Chung Se Yung.