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Friday September 7, 8:15 PMConvicted S.Korean chairmen: your country needs youSEOUL, Sept 7 (Reuters) - In most developed countries, a tycoon convicted of embezzling millions of dollars might expect his reputation to suffer. But South Korea is not like most countries when it comes to white-collar crime.Its judges also weigh the wider impact of jailing convicted leaders of the country's massive "chaebol" conglomerates, which employ hundreds of thousands of South Koreans and are the main drivers of its economy. On Thursday, an appeal court upheld the three-year sentence for Hyundai Motor chief Chung Mong-koo for embezzling more than $100 million but suspended it for five years, with the main judge arguing that putting him behind bars could hurt Asia's fourth largest economy. By Friday, local media were reporting that he would join the entourage of South Korean President Roh Moo-hyun in Pyongyang for a historic summit with the North's leader Kim Jong-il. And an official laughed when asked whether the conviction might mean that Chung would step down from his post on the committee trying to bring the 2012 Expo to the port of Yeosu. "The problem is that courts make generous judgments based on unproven theories that there will be a management crisis if they throw the chief of a thriving conglomerate in jail," said Kim Sun-woong, executive director of the shareholder activist group the Centre for Good Corporate Governance. But he added: "While the public's opinion is negative toward the chaebol in general, most people also will acknowledge their contribution to the economy." Chung's suspended sentence leaves him free to run the world's sixth-largest automaker, with ambitions to rise even higher. In 2004, a court suspended a three-year jail term for fraud for Chey Tae-won, chief executive of SK Corp, the country's top oil refiner, so he could carry on running the company. A healthy balance sheet can be decisive with courts. Chung's company was doing well -- accounting for 7 percent of the country's total exports -- and serves as a major corporate sponsor. He has paid back the amount he was convicted of stealing and pledged to give hundreds of millions of dollars to charity. Conglomerate Daewoo's former chairman Kim Woo-choong was pardoned for bribery in the mid-1990s when the company was doing well. But two years ago -- after the company had collapsed -- he was sent to prison for fraud and embezzlement. And for anything beyond white-collar crime, the system is less forgiving. In July, one of South Korea's richest businessmen was sentenced to 18 months in jail for abducting karaoke bar workers, punching them and hitting them with a steel pipe. Hanwha Group chairman Kim Seung-youn and several bodyguards had stormed into an upscale Seoul karaoke bar in mid-March, seeking those Kim said were responsible for attacking his son earlier that month. (With additional reporting by Jessica Kim) |
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