Hyundai Chairman Ordered to Pay $60M for Bad Management

Being chairman of a big automaker is not the safest, most lucrative job in the world, as Chung Mong-koo found out today, after the Seoul Central District court decided to make him pay $60 million in damages to the carmaker for losses he has caused by taking bad business decisions.

To refresh your memory, Chung Mong-koo is the same man who back in 2008 was convicted of embezzlement and breach of trust and sentenced to a three-year suspended imprisonment. His sentence was later pardoned by South Korean President Lee Myung-bak, who, during his career, was... Hyundai's CEO.

"The court has recognised the fact that Chung made Hyundai Motor participate in the share sales to prevent the threats to the Hyundai Group's managerial rights, although it could inflict damage on his company," the ruling of the court was quoted as saying by Autonews.

"This is a case that reveals the problem of family-run management that focuses on the interests of major stockholders and the executive of Hyundai Motor."

The sentence comes after back in 2008 a group of 14 minority shareholders and a nongovernmental group called Solidarity for Economic Reform sued the former chairman, together with Kim Dong-jin, vice president of parts supplier Hyundai Mobis. The latter was also sentenced to pay $47 million.

"We welcome the court's ruling that management had a clear responsibility in this case," the group of plaintiffs said according to The Telegraph.
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram
About the author: Daniel Patrascu
Daniel Patrascu profile photo

Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
Full profile


Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories