The lawyers forMotor Group Chairman Chung Mong-koo, who is running his automotive companies from a jail cell, certainly are proving their creativity in repeated attempts to free the second-wealthiest man in Korea on bail.
Chung was arrested April 28 on charges of embezzlement and breach of trust and efforts to free him are providing high drama.
The industrialist is an important man, credited with making, and sister auto maker Kia, global players. They are the gems in an automotive empire that spans all facets of car making from steel and parts to logistics and a finance arm – all interconnected and overseen by the patriarch.
Chung is a control freak, who makes things happen through sheer willpower and attention to detail.
So it was not surprising initial attempts (we’ll call this Argument A) to have him freed on bail focused on the inability of the company to manage without its omnipotent chairman. Argument A contends only Chung can make necessary decisions surrounding plans for a new Kia plant in the U.S. and a Hyundai plant in Czech Republic.
A rudderless Hyundai not only jeopardizes such projects, but the Korean economy itself, while holding hostage the welfare of communities suddenly uncertain about the fate of promised investment.
A leniency campaign, driven by suppliers and industry groups, reportedly has generated more than 1 million signatures on petitions calling for the release of the business magnate to restore stability to the “whole Korean industry.”
When none of this worked, the mighty Chung was rolled into a June 12 bail hearing in a wheelchair, citing frail health.
It set the stage for Argument B. The head of the family-owned conglomerate said he could claim only partial responsibility because he had no direct knowledge of illegal funds or what they were used for, given the autonomy of the CEOs within his realm.
Surely the court didn’t think Chung single-handedly made all corporate decisions.
But Korean law has its own idiosyncrasies. One is the belief only a self-confessed and contrite accused should be granted bail.
So in a new bail petition submitted June 14, we learn of Chung’s epiphany. We’ll call it Argument C.
In his new recital of the facts, the maven takes full responsibility. He was told of the need for a slush fund and authorized it.
One can only assume someone at the prosecutors’ office is doing the math. If Argument B cancels A, and the sum of C is less than the scope of the charges in the first place, then the lawyers aren’t done yet.
The next bail hearing is set for June 26, and it is anyone’s guess what ploy is being hatched in preparation.
Ultimately, whether Chung is convicted will speak volumes about how serious the judiciary is about cleaning up corporate Korea.
Ironically, Chung is a founder of the watchdog group charged with eliminating corporate abuses, signing the Korean Pact on Anti-Corruption and Transparency charter in 2005 as an industry representative.
Convicted or not, his legacy will include the role he played in putting corruption on trial.