Seoul: The chairman of Hyundai Motor Group was released on bail on Wednesday two months after his arrest for alleged embezzlement, helping dispel fears about a damaging leadership vacuum at the world's No.6 car maker.
Hyundai shares closed up 0.13 per cent at 78,000 won, outperforming the broader market's 0.71 per cent fall. Chung Mong-koo will be released from a detention centre once he pays bail of 1 billion won ($1.04 million), Seoul Central District Court spokesman Lee Sang-hoon said.
"Hyundai can resume global expansion strategies which were postponed during the chairman's absence, and find ways to resolve its ongoing labour dispute," said Suh Sung-moon, auto analyst at Korea Investment & Securities. Union workers at Hyundai began a four-day strike on Monday, demanding a 9.1 per cent rise in base salary.
Analysts had been concerned that a prolonged detention for Chung, known for his charismatic, hands-on management style, could dent Hyundai's ambition to be among the world's top five auto makers, along with affiliate Kia Motors Corp., by 2010.
Chung was arrested in late April over allegations Hyundai and its affiliates set up slush funds to pay for political favours. He was charged with breach of trust and embezzling about $110 million in company funds, and with incurring losses at group companies by forcing them to support weaker affiliates.
Since the scandal broke, Hyundai has delayed building a $1.3 billion car plant in the Czech Republic, while Kia postponed a groundbreaking ceremony at its first US factory in Georgia. Chung, 68, who has said he was suffering from high blood pressure, pains and dizziness, applied for bail last month.
"The court concluded that concerns the defendant would flee and destroy evidence have disappeared now the investigations are completed," court spokesman Lee said by telephone.
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