Chung Mong-koo

Chung Mong-Koo
Born (1938-03-19) 19 March 1938
Tongchon County, Gangwon Province, South Korea
Education Hanyang University
Alma mater Hanyang University (B.S.)
Occupation Chairman of Hyundai Motor Group
Net worth $6.8 billion (2014)[1]
Spouse(s) Lee Jung-Hwa (Deceased)
Children 4
Awards Van Fleet Award (2009)
Chung Mong-koo
Hangul 정몽구
Hanja 鄭夢九
Revised Romanization Jeong Monggu
McCune–Reischauer Chŏng Mongku

Chung Mong-koo (born March 19, 1938, in Gangwon Province) is the chairman of Hyundai Motor Group, a prominent car manufacturer in South Korea. The Hyundai Motor Group consists of 42 subsidiaries and is the second largest Chaebol in South Korea. Chung succeeded his father, Chung Ju-yung, the founder of the conglomerate known as the Hyundai Group. When the conglomerate split into several parts in 1999, Chung Mong-koo took over the Hyundai Motor division. He is the eldest surviving son of Chung Ju-yung's eight sons.

He was convicted of embezzlement and breach of fiduciary duty in February 2007,[2] but was given a suspended sentence and was fully pardoned by President Lee Myung-bak.[3]

As of March 2014, his net worth was $6.8 billion according to Forbes.[1]

Education

Professional experience

He also owns Innocean, a marketing agency, with his eldest daughter Chung Sung-yi.[4]

Management

Chung is described as a "vigorous septuagenarian" who comes to work at 6:30 a.m. and "personally heads monthly quality reviews with senior executives".[5]

Although he only holds 5.2% of Hyundai Motor’s stock, Chung "wields disproportionately strong control" and is able to control its board thanks to a complex corporate governance arrangements in which Hyundai Motor owns 34% of Kia, which owns 16.9% of Mobis, which in turn owns 20.8% of Hyundai Motor. This means that "because the companies essentially control each other, no outside shareholder is strong enough to name board members".[5]

Controversies

2007 embezzlement conviction

In 2006, he and his family were targeted by the Seoul Supreme Prosecutor's Office as part of an investigation into embezzling 100 billion won ($106 million) from Hyundai to create slush funds to bribe officials.[6] Despite a travel ban, Chung left South Korea in April 2006. Chung was arrested on 28 April 2006 on charges related to embezzlement and other corruption.[7][8]

On 5 February 2007 he was convicted of embezzlement and breach of fiduciary duty for selling securities to his son Chung Eui-sun at below-market prices. He was sentenced to three years in prison.[2] Chung remained free on bail while he appealed the sentence.[9] On September 6, 2007, Chief Judge Lee Jae-hong ruled to suspend the sentence of Chung Mong-koo (in consideration of the huge economic impact of imprisonment), ordering instead of a 3-year jail term, community service and a $1 billion donation to charity.[3]

The trial was seen as "a victory for transparency and rule of law in South Korea",[10] but on August 15, 2008, South Korean President Lee Myung-bak granted him a special pardon to allow Chung to continue to contribute to the development of Hyundai Motor Group as well as the Korean economy.[11]

Nepotism

His only son Chung Eui-sun is his "heir apparent", despite his relatively unproven business and leadership skills. According to Bloomberg, "no one can assess how Eui Sun will perform when he becomes chairman because his father keeps him on a tight leash".[5]

Furthermore, in 2011, he was accused of nepotism[5] when Ozen, a bakery cafe whose advisors included his three daughters Sung-yi, Myung-yi, and Yun-yi, set up shop in company buildings.[12] Ozen eventually closed in 2012.[13]

Awards and honors

See also

References

  1. 1 2 Brown, Abram (March 3, 2014). "Forbes Billionaires: Full List Of The World's 500 Richest People". Forbes.
  2. 1 2 Seonjin Cha (5 February 2007). "Hyundai Motor's Chung Found Guilty of Embezzlement". Bloomberg.
  3. 1 2 "Guilty Hyundai boss escapes jail". BBC News. 6 September 2007.
  4. ↑ David Kiley (April 25, 2011). "Innocean Strives to Be Known as More Than Hyundai Agency". AdAge.
  5. 1 2 3 4 John Lippert; Alan Ohnsman; Rose Kim (March 1, 2012). "Billionaire Chung Proving Hyundai No Joke Aiming for BMW". Bloomberg Business.
  6. ↑ Kim Jong-moon, Chun Su-jin (28 March 2006). "Hyundai case widens with official's arrest". JoongAng Daily.
  7. ↑ Olson, Kelly (28 April 2006). "Hyundai Chairman Chung Mong-Koo Arrested". Associated Press.
  8. ↑ Sang-Hun, Choe (28 April 2006). "South Korea Arrests Head of Hyundai Motor". New York Times.
  9. ↑ Cheon Jong-woo (5 February 2007). "Hyundai Motor chairman sentenced to 3 yrs in jail". Reuters.
  10. ↑ Ishaan Tharoor (August 10, 2010). "Top 10 CEO Scandals: Chung Mong Koo, Hyundai Motor". Time magazine.
  11. ↑ Jin Hyun-joo (March 30, 2010). "Amnesty clears the way for Lee's comeback to Samsung top job". Korea Herald.
  12. ↑ "Conglomerate offspring compete in rising bakery cafe sector". The Dong-a Ilbo. November 2, 2011.
  13. ↑ Kim Su-heon (October 13, 2012). "Big bakeries roll on despite absence of chaebol daughters". Hankyoreh.
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