Hyundai chairman goes on trial for embezzlement

SEOUL - Hyundai chairman Chung Mong Koo went on trial yesterday in Seoul on charges of embezzling funds from South Korea's largest carmaker to bribe bank and Government officials.

Chung was indicted on May 16 for misusing 400 billion won ($667 million) of Hyundai Motor's money and embezzling 120 billion won to set up a slush fund, according to court filings.

Chung, 68, was aware of the fund but denies involvement in setting it up, says his lawyer, Kim Jae Jin.

The trial of Chung, head of South Korea's third-wealthiest family, is a test of President Roh Moo Hyun's pledge to attack corruption at the country's biggest industrial groups.

The trial will take place in the same courtroom where Daewoo Group founder Kim Woo Choong was sentenced to 10 years in prison for fraud and embezzlement this week.

Chung's month-long detention has disrupted operations at the carmaker, including the start of construction of a $1 billion plant in the Czech Republic and the design of new models.

- BLOOMBERG