Array

Seoul, June 1 : The chairman of Hyundai Motor Group appeared in court in blue prison stripes at the start of his trial to apologise for wrongdoings he blamed on his drive to create a global car maker.

''I only rushed forward to make a global car company and failed to look back, causing several legal problems,'' Chung Mong-koo, told the panel of judges in a court room packed with reporters and Hyundai officials.

''I have deep regrets, and will correct the wrongs if given an opportunity this time,'' said the 68-year-old Chung.

He was arrested in late April after an investigation into allegations that Hyundai Motor and its affiliates had created slush funds to offer cash for political favours.

The probe, which officially started on March 25, has touched on how the country's sprawling family-run conglomerates, or chaebol, shift money within group companies, using complex share ownership networks to control their business.

He was indicted in May on charges of breach of trust and embezzling 103.4 billion won ($109.4 million) in company funds, some for personal use, and for incurring losses at group companies by forcing them to support weaker affiliates.

Chung did not enter a plea -- not a requirement in South Korea's judicial system. Prosecutors said they were opposed to his request for bail.

He has been held in a detention centre near Seoul for more than a month. The trial is expected to run for weeks.

Shares in Hyundai fell 1.9 percent to 72,100 won by 0432 GMT versus a 0.8 percent drop in the broader market CHAEBOL

BUSINESS PRACTICES

On Tuesday, the founder of the Daewoo group was sentenced to 10 years in prison and forfeited 21.4 trillion won ($22 billion) for fraud and embezzlement in the country's biggest financial scandal.

Kim Woo-choong, 69, had turned Daewoo into the second-largest conglomerate in the country before fleeing in 1999 as his empire was collapsing under more than $75 billion in debts. He returned home last June, saying he wanted to make peace with his past.

Firms such as Hyundai and Daewoo were instrumental in rebuilding the economy in the years after the 1950-53 Korean War. But shady business practices and unrestrained borrowing were partly blamed for the financial crisis of the late 1990s.

Some analysts are concerned that a lack of direction at the top could hurt the ambitious global expansion plans of Hyundai, the world's seventh-largest auto maker by sales volume with its affiliate Kia Motors Corp.

Hyundai has previously apologised for the scandal and said its chairman's family would donate their $1 billion stake in car shipping affiliate Glovis to charity.

Embezzlement and misappropriation of corporate funds involving more than 5 billion won can each carry life jail terms in South Korea.

Reuters