S. Korean corporate watchdog probes Hyundai Motor over unfair deals

South Korea's corporate watchdog has launched a probe into Hyundai Motor Group, the country's leading automaker, over alleged unfair deals among its affiliates, officials said Monday.

Hyundai Mobis Co., Glovis Co., Hyundai Hysco Co. and five other affiliates will be subject to an investigation of their alleged illegal trading by the Fair Trade Commission (FTC), they said.

Glovis, an auto freight unit of Hyundai Motor Group, which controls about 70 percent of the domestic auto logistics market, is suspected of forming a huge amount of secret funds.

An FTC official said the investigation will be focused on suspicions of unfair practices in favor of the group's auto shipping unit.

The corporate watchdog has reiterated its stance that it would launch an inquiry into Hyundai Motor after the ongoing investigations into the business group by prosecutors are completed.

The FTC ruled out the possibility that other business groups may face similar inquiries, but the business community is fretting over the widening of the investigations.

The group's Chairman Chung Mong-koo was granted bail by a Seoul court and released from prison in June after two months of detention on embezzlement and other charges.

Chung is suspected of creating about 103.4 billion won in slush funds through the automaker's key units, including Hyundai Mobis, Kia Motors and Glovis, from April 2000 to March 2006.

To atone for public discomfort over the group's scandal, Hyundai Motor promised to donate 1 trillion won (US$1.06 billion) to charity.

Chairman Chung and his son, Eui-sun, will donate their 60 percent stake in Glovis. The senior and junior Chungs hold a 28.1 percent stake and a 31.9 percent stake in Glovis, respectively, worth 1 trillion won.

Shares in Hyundai Motor fell 1.83 percent to close at 80,300 won following the news. Glovis shares also dropped 9.05 percent to end at 32,650 won.

Seoul, Sept. 11 (Yonhap News)