S Korea demands 6-yr jail term for Hyundai head

SEOUL, June 19 (Reuters) South Korean prosecutors today sought a six-year jail term for Hyundai Motor Group's chairman for embezzlement at a court hearing of his appeal against a three-year sentence handed down in February.

In February, a South Korean court sentenced Chung Mong-koo, the chairman of the world's No 6 automaker, to three years in jail after he was found guilty of embezzlement and breach of trust.

But the court decided not to revoke Chung's bail terms, citing the need to protect the national economy and to give him time to prepare his appeal.

He filed an appeal against the sentence, while South Korean prosecutors issued a counter appeal asking for the original sentence to be increased.

Chung has been on trial on charges including embezzlement of company funds, incurring losses at group companies and operating slush funds.

Investors have been concerned that Chung's prolonged absence from the frontlines of management could dent Hyundai's overseas expansion plans.

Lawyers and auto analysts had expected the court to hand down a suspended jail term to leave Chung at the helm of Hyundai, a nod to the group's importance in Asia's fourth-largest economy.

Chung said in May he would honour an earlier pledge to donate about 1.08 billion dollars to charity over seven years.

Hyundai Motor shares trailed the Seoul stock market's benchmark even before the demand was put forward, trading 1.7 per cent lower at 73,600 won, compared with a 0.1 per cent gain in KOSPI.

REUTERS KN RK0755