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Hyundai Motor Apologizes

April 20, 2006|From Reuters

SEOUL — South Korea's biggest carmaker, Hyundai Motor Co., apologized on Wednesday for a deepening bribery scandal and said its chairman's family would donate $1 billion in shares of an affiliate to charity.

Prosecutors are investigating whether Hyundai operated slush funds and offered cash for political favors via a lobbyist. The probe also touches on how the country's sprawling family-run conglomerates, or chaebol, shift money within group companies, using complex share ownership networks to control businesses.

Three men have been arrested as part of the probe.

"We apologize since as Hyundai Motor Group we should show a good example, but we did not fulfill that responsibility and caused the people concern," Hyundai Vice Chairman Lee Jeon-kap told a news conference.

"Hyundai will cooperate actively with the prosecutors' investigation," the company said.

Hyundai Motor Chairman Chung Mong-koo and his son, Chung Eui-sun, will give away their 60% stake in affiliate Glovis, an auto shipper -- valued at 1 trillion won ($1.05 billion).

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