Korean Criminal Justice for Tycoons: Overheard at the Seoul Court of Appeals
by Brendon Carr
I don’t have a position on whether Chung Mong-koo is the victim of a political use of the prosecution to oppress a particular businessman, nor do I have a position on whether Chung Mong-koo is or is not fit to lead Hyundai Motor Company. Actually, I rather think he’s done a good job as Hyundai makes very good cars and has emerged as a globally-competitive business under his watch. But I do think the Korean tendency to go easy on chaebol leaders found guilty of crime “for the good of the economy” is unhealthy—especially when you consider the treatment foreigners accused of crimes get.
This is what I imagine the judge said to Mr. Chung at sentencing:
“Defendant Chung Mong-koo, chairman of Hyundai Motor Company, please rise and accept the court’s sentence. You are a bad man, very bad. This court upholds your earlier conviction for embezzling over W120 billion (US$130 million) from the company, which money ended up in a slush fund you say (but can’t prove) you used to pay bribes to politicians. What? No, the names of the politicians are not important and this court will NOT tolerate any further questions about that. This is very bad corporate-governance practice, as that money belongs to the shareholders of your publicly-traded company. You have been stealing from your shareholders for your own purposes. This cannot go unpunished. Korea follows global standards of corporate-governance excellence, and we are very harsh on crime.
“However, the lower court did not take account of your stature as a leading businessman. You are hereby sentenced to appropriate another W1 trillion from your shareholders and ‘donate it to society’ over the next ten years. I will of course give you credit for the money you already embezzled and ‘donated to society’ while you were initially under investigation. You are also ordered to get together with CEOs from other Korean companies for a minimum of two hours—TWO hours, mister, and not a minute less!—and snicker with them about this country’s lax corporate-governance standards, and double standards of justice for rich people and ordinary working people. (And foreign investors? Fuck them. Ha ha. Am I right? Heh.) Okay, this is the part where I’m supposed to say I can’t stand to look at you any more. Now get out out here and go back to your office. But I’ll be calling you once I get into the National Assembly (wink wink).
“Next defendant—Lone Star Funds. Bailiff, bring me my endoscope.”
Comments
6 Responses to This Entry
Comments Policy: Comments to Korea Law Blog are moderated. This means abusive, or just plain stupid comments will be deleted. So don't be a jerk. It also means there may be some delay from the time you post a comment to the time it shows up here. If your comment wasn't against the policy, it will show up in a little bit.
-
About Korea Law Blog
Korea Law Blog is brought to you by Brendon Carr, an American lawyer working as a foreign legal consultant for more than 10 years in Seoul. (Brendon is not admitted as an attorney in Korea. But you knew that.) -
Contact Details
-
Tel. +82 (0)2 772 2734
Fax +82 (0)2 772 2800
Mobile +82 (0)10 8788 0750 -
Download My FREE Korea Employment Law FAQ
-
Korean Media
-
Blogroll
-
Awesome!
I really think that the whole Chung Mong-koo episode is comedy at it’s worst. Did anyone see when he showed-up for bail hearing last year in a wheelchair?! He was wearing hospital clothes and wearing a surgical mask, like the ones worn by sick Korean kids and Michael Jackson. Anyway, he gets bail and then promptly flies to the US to inspect the an overseas Hyundai plant. Sans wheelchair, of course.
Ouch… so true. Really, what incentive is there in Korea to not commit white-collar crime? Plenty of it goes unpunished in the States too, but Korea has shown me a whole new level of bad.
Today’s Korea Times above-the-fold cover story photo is of Hanwha Group chairman Kim Seung-youn wearing a hospital gown (if you must ask, yes it is has the name and logo of Seoul National University Hospital on it) and sitting in a wheelchair. His prison sentence was suspended on the condition that he do 200 hours of community service....
A complete travesty of justice. I bet Martha Stewart wished she would have been in the Korean Justice system. The judge probably would have slapped her on the ass and invited her for lunch with his wife for some pointers.
Hmm, steal money from the company (& thereby it’s shareholders) and get the company (& thereby it’s shareholders) to pay 840 million in penance!!!
There has been mixed reporting on whether the W840+ billion “donation” will come from Chung’s personal wealth or from the company. It’s been proposed that the Chung family might donate their shares in Hyundai Glovis, a company set up to siphon money into the pockets of the Chung family by usurping corporate opportunities from Hyundai group companies. A US$5 million investment in 2001 was magically turned into billions, after the Chung-owned company “beat out” other logistics companies to “win” a contract from Hyundai Motor to deliver cars. What? My son owns that company? No way!