Seoul — The name on the court docket reads Chung Mong-koo, but it may be the company he leads that's on trial.
Chung, the 68-year-old chairman of Hyundai Motor Co., faces sentencing Monday for embezzlement and misappropriation of corporate funds. He could receive a six-year jail term.
For Hyundai, his legal troubles could hardly come at a worse time.
Despite earning top quality ratings in American customer surveys, outranking even Japanese rivals Toyota Motor Corp. and Honda Motor Co., Hyundai saw sales flatten last year. Profit skidded 35%, hurt by chronic labor strife, currency exchange fluctuations and reluctance on the part of many American and European buyers to shell out large sums for Hyundai cars and trucks.
Now Chung, who engineered the automaker's transition from industry also-ran to a $29-billion-a-year empire selling in every region of the world, faces an uncertain future.
"Hyundai Motor relies on one man. Only he has power to control management," said Stephen Ahn, an auto analyst at Woori Investment & Securities in Seoul.
Since Chung was arrested in April, the South Korean company has delayed factory projects in the United States and Eastern Europe and put a host of decisions on hold at a time when Hyundai's fortunes have soured.
Managers at the automaker say a succession plan is in place in case the worst comes to pass. But many South Koreans expect the chairman, the oldest surviving son of Hyundai Group's legendary founder, industrialist Chung Ju-yung, to receive a suspended sentence. One factor in Chung's favor: Hyundai Motor's importance to the national economy. South Korea may not want to put at further risk a company that accounts for 5% of the country's exports and employment.
"We're really looking forward to putting this behind us," said Oles Gadacz, a spokesman at Hyundai headquarters here. Chung has been free on bond since the summer, but health problems and the trial have taken a toll on the chairman and his company. "There are a lot of brush fires we have to fight, a lot of things that have been neglected."
Among them are efforts to launch manufacturing plants in the Czech Republic and in West Point, Ga., 90 miles southwest of Atlanta. The latter facility would build cars for Kia Motors Corp., which Hyundai controls, adding to factories in South Korea, China, India, Turkey and Montgomery, Ala.
