Kia's Ex-Head Sentenced to 7 Years
Oct. 21, 1998
SEOUL, South Korea (AP) _ A former head of bankrupt Kia Motors Co. was sentenced to seven years in prison today for embezzling $37 million in company funds.
Kim Sun-hong, 66, who headed Kia until last October, was found guilty of using the money to bribe government officials, politicians and bankers to get preferential bank loans to keep his company afloat.
Kim also was convicted of illegally arranging for Kia to lend $814 million to several troubled subsidiaries and guaranteeing $2 billion in debt incurred by other units.
Prosecutors had sought a 12-year sentence for Kim.
Two other former Kia executives were given prison terms of up to 3 1/2 years for their part in the scandal. Two more were given suspended terms.
``The defendants ... deceived stockholders and weakened financial institutions,'' Judge Sohn Ji-yeol of the Seoul Criminal Court said.
Kia collapsed under $8.4 billion in debt in the summer of last year. Its failure eroded foreign investor confidence, fueling a flight of foreign capital.
South Korea was forced to accept $58 billion from the International Monetary Fund in December to bail out its faltering economy.
Kia, once the nation's second largest automaker, was sold to industry leader Hyundai Motors Co. in an auction Monday.