Hyundai’s big gift still missing

With Hyundai Kia Motor Group Chairman Chung Mong-koo set to appeal his embezzlement conviction tomorrow, attention is being focused on how the conglomerate will meet its so-far unfulfilled pledge to donate 1 trillion won ($1.1 billion) to charity.
In the earlier trial, a Seoul court made it clear that action on the group’s social contribution plan will be considered in administering justice.
Chung is entering the third round of his legal battle by appealing his conviction and three-year sentence to the Seoul Central District Court. He was convicted in February of creating a 90 billion won slush fund and damaging his companies through breach of trust. If he loses this round he can still appeal to the Supreme Court.
Shortly after Chung’s arrest in April last year, the nation’s second-largest conglomerate said it would make the huge charity donation by selling its stake in the group’s logistics affiliate, Glovis Co. Critics said it was a move to win favor with the public after Chung was charged.
At the time of the announcement, the Chung family held a combined 60 percent stake, or 22.5 million shares, in Glovis and their value stood at around 939.4 billion won based on the previous day’s closing price of 41,750 won. The Glovis share price nose-dived immediately after the pledge. Glovis stock declined to about 25,000 won in early March. It rebounded in May, ending at 39,450 won on May 18, putting the value of the 22.5 million shares at 887.6 billion won. Even still, the group would be short 112.4 billion won on its pledge.
Although the group has said it would meet the 1 trillion won pledge by other means, including cash or stocks in other affiliates, no details of which charities or foundations would receive the windfall have been disclosed.
The group’s public relations team only said the ongoing appeals of Chung have caused the delay and details will be revealed after legal proceedings end.
Giving large sums to charity to make up for legal stumbles was something of a fad last year. Last February, Samsung Group, Korea’s largest conglomerate, donated 800 billion won as penance for avoiding inheritance tax. U.S. investment fund Lone Star pledged 100 billion won when it was accused of tax evasion.

By Seo Ji-eun Staff Writer [spring@joongang.co.kr]