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The Supreme Prosecutor¡¯s Office on Thursday applied for an arrest warrant for Hyundai Automotive Group chairman Chung Mong-koo on charges of embezzlement and breach of trust. Chung¡¯s son, Kia Motors chief Chung Eui-sun, will be indicted without arrest. A Seoul District Court judge will decide whether to issue the warrant on Friday.
News of the chairman¡¯s impending arrest sent the group into a panic. Hyundai staff were utterly demoralized, saying the ¡°worst-case scenario¡± had become a reality. Hyundai Motor was supposed to announce first-quarter business results on Thursday but canceled the plan. ¡°The arrest of chairman Chung made the situation so bleak that we can¡¯t predict what will happen at all, and major projects including factory construction overseas will come to a complete stop,¡± a senior Hyundai executive said.
Hyundai dealers overseas are already worried about damage to the automaker¡¯s image. A Hyundai dealer in the U.S. said what the prosecution did was the equivalent of a 10-year marketing campaign by Hyundai rival Toyota. The international media swiftly picked up the story. CNN said Hyundai Motor, which makes up 70 percent of the Korean car market, will be hurt by Chung¡¯s arrest. The BBC and AP also reported at length on the corruption charges and the rudderless appearance of the group.
The reverberations reached into all areas of Hyundai¡¯s business. In a letter to Hyundai Motor, the Federation of International Football Associations (FIFA) said Hyundai Motor¡¯s pledge to supply cars for the upcoming World Cup was crucial for the championship in Germany. It expressed hope that the matter will be resolved swiftly. ¡°FIFA told us that if it decides that Hyundai Motor can¡¯t perform its role as a partner for the World Cup any longer because of the investigation, it may consider terminating the sponsorship contract with us,¡± Hyundai said.
(englishnews@chosun.com )
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