Hyundai chairman appears for questioning in scandal

<p>Hyundai Motor Co. Chairman Chung Mong-koo appeared Monday for questioning by prosecutors about a slush fund scandal engulfing South Korea's largest automaker.</p><p>A stern-looking Chung, wearing a pinstriped suit and walking slowly, arrived at the Supreme Prosecutors' Office in Seoul. His arrival was broadcast live on cable news channel YTN.</p><p>"I am sorry to the people of the nation," Chung told reporters. "I will answer the prosecutors' questions."</p><p>Prosecutors questioned his son, Kia Motors Corp. President Chung Eui-sun, last week. Kia is an affiliate of Hyundai.</p><p>Prosecutors have been investigating the Hyundai Motor Group over suspicion it embezzled money from affiliates to create a slush fund and used the money, via at least two lobbyists, to seek favors from the government.</p><p>Over the past month, prosecutors have raided offices of Hyundai and its three affiliates _ Kia Motors, logistics unit Glovis Co. and auto-parts maker Hyundai Autonet _ and questioned key officials.</p><p>The lobbyists have been arrested on charges of receiving money from Hyundai in exchange for promises to help the company win construction approvals and permits, and other business favors.</p><p>It is unclear if the lobbyists bribed government officials. It is illegal in South Korea to accept money in return for exercising influence.</p><p>Earlier this month, prosecutors questioned two other top Hyundai executives as well as a former deputy governor of the state-run Korea Development Bank.</p><p>Hyundai announced last week that the two Chungs planned to donate one trillion won (US$1.1 billion; euro854 million) worth of personal assets to society. The company also said it "apologizes" for causing concerns to the public over the scandal.</p><p>Shares in Hyundai Motor fell Monday, declining 2.8 percent to 85,500 won (US$90; euro73).</p><p>Kia last month announced plans to build its first manufacturing plant in the United States. The West Point, Georgia, plant, scheduled to begin production in 2009, is expected to create about 5,500 jobs.</p><p>A groundbreaking ceremony for the facility scheduled for later this month has been indefinitely postponed, Kia said last week. Preparatory work related to the project is continuing.</p><p>Hyundai Motor has a U.S. factory in neighboring Alabama.</p><p>The Hyundai Group aims to become the world's sixth-largest carmaker by 2010 and is aggressively expanding overseas production to meet the goal.</p>