Hyundai boss must pay $60 million for losses to firm
A South Korean court Monday ordered Hyundai Motor chairman Chung Mong-Koo to pay almost $60 million in damages to his company for loss-making deals.
By Agencies |
SEOUL: A South Korean court Monday ordered Hyundai Motor chairman Chung Mong-Koo to pay almost $60 million in damages to his company for loss-making deals.
The Seoul central district court, ruling on a damages suit brought by shareholders, said Chung must pay 70 billion won (59.7 million dollars) to compensate for losses caused to the company by his business decisions.
A group of 14 minority shareholders and a non-governmental group called Solidarity for Economic Reform filed suit in 2008 against Chung and Kim Dong-Jin, vice president of parts supplier Hyundai Mobis.
They claimed the executives should pay compensation for the losses which the company suffered in 2001 from its participation in share sales of its affiliates -- Hyundai Airspace and Aircraft Co. and Hyundai Hysco.
"The court has recognised 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 judges' ruling as saying.
"This is a case that reveals the problem of family-run management that focuses on the interests of major stockholders and the executives of Hyundai Motor," it said
The court ordered that Kim pay a small percentage of the total damages since he was also responsible.
In 2007 Chung was found guilty of breach of trust and embezzling 90 billion won (then worth 97 million dollars) in company funds through fraudulent accounting. He was given a three-year suspended prison term.
The Seoul central district court, ruling on a damages suit brought by shareholders, said Chung must pay 70 billion won (59.7 million dollars) to compensate for losses caused to the company by his business decisions.
A group of 14 minority shareholders and a non-governmental group called Solidarity for Economic Reform filed suit in 2008 against Chung and Kim Dong-Jin, vice president of parts supplier Hyundai Mobis.
They claimed the executives should pay compensation for the losses which the company suffered in 2001 from its participation in share sales of its affiliates -- Hyundai Airspace and Aircraft Co. and Hyundai Hysco.
"The court has recognised 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 judges' ruling as saying.
"This is a case that reveals the problem of family-run management that focuses on the interests of major stockholders and the executives of Hyundai Motor," it said
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The court ordered that Kim pay a small percentage of the total damages since he was also responsible.
In 2007 Chung was found guilty of breach of trust and embezzling 90 billion won (then worth 97 million dollars) in company funds through fraudulent accounting. He was given a three-year suspended prison term.
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