IE 11 is not supported. For an optimal experience visit our site on another browser.

S. Korean auto industry supports Hyundai boss

South Korea's automobile industry began a campaign Thursday asking for leniency and temporarily release of the indicted chairman of Hyundai Motor Co., the country's largest vehicle maker.
/ Source: The Associated Press

South Korea's automobile industry began a campaign Thursday asking for leniency and temporarily release of the indicted chairman of Hyundai Motor Co., the country's largest vehicle maker.

Three industry groups — Korea Automobile Manufacturers Association, Korea Auto Industries Coop. Association and Hyundai-Kia Suppliers' Association — are aiming to collect 1 million signatures and submit the petition to the country's courts, they said in a statement.

"The Korean auto industry is facing a difficult situation due to the management vacuum at Hyundai-Kia Motors, while the growing uncertainty from the lengthy absence of the management is threatening the business of small and midsize auto part makers," the statement said.

Kia Motors Corp., a Hyundai affiliate, is the country's second-largest automaker.

Hyundai Chairman Chung Mong-koo was indicted Tuesday on charges of embezzlement and breach of trust and faces a lengthy jail sentence if found guilty. No trial date has been set.

Prosecutors said in the indictment that Chung allegedly embezzled company money to create 103.4 billion won ($109 million) worth of slush funds and caused damage to the Hyundai Automotive Group by illegally supporting financially weak affiliates with money from other group members.

The groups are also concerned that the management setback could deal a blow to the South Korean economy as the Hyundai-Kia group accounts for nearly 75 percent of the country's auto production and exports, the statement said.

Hyundai Motor and Kia Motors earlier this month said they have indefinitely postponed groundbreaking ceremonies for the construction of new plants in the Czech Republic and the United States because of Chung's arrest.