Hyundai Boss OK'd Slush Fund

Contrary to earlier testimony, Hyundai Motor Group Chairman Chung Mong-koo now says he takes full responsibility for raising an illegal slush fund in a new bail petition submitted by his lawyers to the Seoul central district court.

Published reports say Chung admits in the petition that Hyundai executives did advise him of the need for a slush fund to make payments outside of the company. He says he authorized his officers to develop the fund and takes full responsibility for it.

The short petition, filed June 14 and reportedly leaked to the press by a Hyundai insider, substantially removes some of the basis by which the court has refused to grant Chung's bail. Observers familiar with Korean law say the petition is a maneuver by lawyers to secure their client's release and not a spontaneous expression of contrition by the industrialist.

“I feel overall responsibility for the creation and use of the slush fund,” Chung is quoted as saying. “When I was told that the funds were necessary, I told our employees to take care of it. I accept full responsibility as the chief executive.”

In the Korean court system, bail usually is not granted to a defendant who refuses to acknowledge responsibility for the charges against him.