Array

SEOUL, June 12 (Reuters) The chairman of Hyundai Motor group admitted on Monday to having a role in setting up slush funds through affiliates of South Korea's top auto maker.

Making a second appearance at his embezzlement trial, 68-year-old Chung Mong-koo sat in court in a wheelchair. It was not immediately clear what was ailing him.

''I admit to my guilt, to a certain extent,'' Chung said when asked about his role in setting up slush funds within Hyundai that are alleged to have been used to offer cash for political favours.

Chung is officially charged with breach of trust and embezzling almost $110 million in company funds, and with incurring losses at group companies by forcing them to support weaker affiliates.

He was arrested in late April after a month-long probe and has been held in a detention centre near Seoul.

During his first court appearance on June 1, Chung apologised for wrongdoings he blamed on his drive to create a global car firm. Prosecutors have opposed his request for bail.

Analysts and company insiders say the charismatic chairman used to have a hand in almost every decision at the auto group and some analysts worry a lack of direction at the top could dent Hyundai's plan to become a top five auto maker by 2010.

Since the scandal broke, Hyundai has delayed building a $1.3 billion car factory in the Czech Republic, while Kia also postponed construction of its first U.S. plant in Georgia.

On Friday, prosecutors said they would not indict Chung's son, Chung Eui-sun, president of Kia Motors Corp., saying the senior Chung had final responsibility.

They did, however, indict Hyundai Motor Vice Chairman Kim Dong-jin and three other Hyundai Motor group senior executives, but did not arrest them.

Hyundai has apologised for the scandal and said the Chung family will donate their $1 billion stake in car shipping affiliate Glovis to charity.

The trial has put the spotlight on attempts to reform South Korea's powerful chaebol, the family-run conglomerates that helped rebuild the economy after the 1950-53 Korean War but were partly blamed for the financial crisis of the late 1990s.

Shares in Hyundai Motor, which have lost more than 20 percent so far this year, closed down 1.18 percent at 75,500 won, against the broader market's 0.34 percent gain.

REUTERS DKS VP1323