Prosecutors demanded a six-year prison term against Hyundai Motor Co. Chairman Chung Mong-koo for embezzlement and other charges Tuesday, adding to the woes of the largest South Korean automaker.
Chung, 68, has been on trial since June on charges of illegally raising a slush fund from affiliates from which authorities say he spent $74 million for private and other purposes, including payments to lobbyists for government favors.
He also has been charged with inflicting financial damage on affiliates through questionable deals and arrangements that allegedly protected or boosted the financial interests of him and his son, Eui-sun, who heads Kia Motors Corp., the country’s second-largest carmaker.
“It’s unavoidable to seriously punish the defendants ... because the crimes in this case are grave,” the prosecutors said in their sentence demand at the trial, which also included other company officials.
The verdict and sentencing are expected next month, according to local media. Chung has been out on bail since late June after two months of detention following his arrest in April.
Chung Mong-koo apologized and pledged to make Hyundai the world’s No. 5 automaker if given the chance. Hyundai and affiliate Kia Motors combined currently rank sixth.
“I’m sorry for causing trouble over this case,” he told the court.
Chung’s defense lawyers called for leniency and asked for a suspended sentence in light of their client’s health and the effects his conviction would have on Hyundai and the entire nation’s economy.
It was unclear how the judges at Seoul Central District Court would rule. But South Korean courts have often come under public criticism for being too lenient on business tycoons after they sentenced high-profile chief executives to suspended jail terms in similar corruption cases.
Hyundai Motor and affiliate Kia Motors Corp. account for more than 70 percent of South Korea’s automobile exports. Autos account for about 10 percent of South Korea’s total exports.
The trial has cast a cloud over the company, which also is suffering from a row with its militant labor union that intensified this week with new strikes.
Unionized workers laid down tools for a total of eight hours at three factories Monday in a dispute with management over the size of a bonus payment. Though workers will not strike Tuesday, they have scheduled a longer walkout Wednesday.
On Tuesday, Hyundai Motor President Youn Yeo-chul was meeting with the head of a labor union to discuss how to end the partial walkout, the company said.