South Korea's biggest car maker, Hyundai Motor Co, apologised on April 19 for a deepening bribery scandal and said its chairman's family would donate $1 billion in shares of an affiliate to charity.
Prosecutors are investigating whether Hyundai operated slush funds and offered cash for political favours via a lobbyist. The probe also touches on how the country's sprawling family-run conglomerates, or chaebol, shift money within group companies, using complex share ownership networks to control their businesses.
Three men have so far been arrested as part of the investigation and several Hyundai executives have been barred from travelling abroad.
"We apologise since as Hyundai Motor Group we should show a good example, but we did not fulfil that responsibility and caused the people concern," Hyundai Vice Chairman Lee Jeon-kap told a news conference, lining up with other executives to bow deeply in apology.
"Hyundai will cooperate actively with the prosecutors' investigation and humbly accept the outcome," the company said in a statement.
Hyundai Motor Chairman Chung Mong-koo and his son, Chung Eui-sun, will give away their entire 60 percent stake in affiliate Glovis, an auto shipper - worth 1 trillion won ($1.05 billion).
Glovis shares slumped by a maximum 15 percent, closing at 35,500 won. Shares in Norwegian shipping group Wilhelmsen, which owns 20 percent of Glovis, dropped 3.3 percent in early trading in Oslo.
Prosecutors said the donation would not alter the course of the investigation.
"The donation is a decision by Hyundai Motor ... so it's irrelevant to the investigation," Chae Dong-wook, a senior prosecutor at the Supreme Prosecutors' Office, told reporters.
US-based buyout firm Lone Star, under investigation in South Korea over suspected tax and currency law violations, said on Wednesday it would give 100 billion won to charity and commit 725 billion won for possible tax payments.
Officials at Hyundai, which makes the popular Sonata sedan, have said business had not been affected by the probe, which coincides with a push to expand overseas. The company aims to become the world's fifth-biggest car maker by 2010.
But the company has delayed US production of a new version of its flagship Santa Fe sport utility vehicle.
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