By Jhoo Dong-chan
The prosecution has rejected a complaint against Hyundai Motor Group Chairman Chung Mong-koo for his alleged breach of trust over the company’s purchase of a prime property in Seoul.
The Seoul Central Prosecutors’ Office said Sunday that it decided not to indict Chung for the group allegedly paying “too much money” for the land in the Gangnam district of southern Seoul previously owned by the state-run Korea Electric Power Corp. (KEPCO).
The group signed a deal to buy the land for 10.55 trillion won, which was more than three times the appraised value of the 79,342-square-meter site.
Its closest rival, Samsung Electronics, allegedly offered just a little over 5 trillion won in its bid.
A minority shareholder of the company filed the complaint, claiming that Chung caused damage to the company and its shareholders by approving the bidding.
However, the prosecution said that in the written complaint, the shareholder only cited media reports about the land purchase, failing to provide evidence to prove Chung’s breach of trust. Prosecutors can dismiss a case without investigation when the complaint is made based on speculation, groundless rumors, or news reports where the truth is unclear.
Various civic groups have continuously criticized the group's board of directors and Chairman Chung for inflicting damage on its employees and shareholders by paying too much for the land purchase.
The stock prices of the company and some of its affiliates declined, with foreign investors selling off shares.
The Solidarity for Economic Reform, a civic group, said in a statement, “Foreign investors were shocked that the chaebol owner family unilaterally decided on a more-than-10-trillion-won investment without due process at the board of directors.”
On the site, Hyundai Motor plans to establish its new headquarters, named the Global Business Center, along with a hotel, a convention center and an auto theme park.