Hyundai Motor Co., South Korea's top automaker, didn't report cash donations to two controversial foundations to its board two years ago, sources said Wednesday, sparking questions over managerial transparency.
In October and December 2015, Hyundai Motor donated a combined 6.88 billion won (US$6 million) to the foundations controlled by Choi Soon-sil, President Park Geun-hye's friend at the center of a massive influence-peddling and corruption scandal that has led to Park's impeachment.
Capitalizing on her close ties to the chief executive, Choi is charged with strong-arming as many as 53 big businesses into donating about 80 billion won to the foundations set up with the aim of boosting the nation's culture and sports. But she has reportedly used a considerable amount for personal purposes.
According to the sources, Hyundai Motor didn't even report the donations to a transparency panel under the board of directors, raising questions over the committee's role.
Hyundai Motor established the commission in April 2015 to ensure transparency in managerial decisions and protect shareholder interests, following a controversial property deal months earlier.
In September 2014, Hyundai Motor Group, the parent of Hyundai Motor, bought a 79,345-square-meter land lot that previously housed the main headquarters of state-run Korea Electric Power Corp. in a posh district in southern Seoul for an estimated 10.55 trillion won, close to triple its appraised value.
A Hyundai Motor official defended the absence of a report to the board. "Only donations exceeding a certain amount are reported to the board via the committee. But the company believed the reporting requirement doesn't apply to the two cases in question."
In contrast, Hyundai Mobis Co. and Kia Motors Corp., which also belong to Hyundai Motor Group, reported their donations to the two foundations to transparency and ethical management committees under their boards in the first half of 2016.
South Korea's top auto parts maker Hyundai Mobis contributed 3.19 billion won, with No. 2 automaker Kia Motors donating 2.73 billion won.
Experts pointed out that big businesses should ramp up efforts to enable their in-house transparency watchdogs to work properly instead of just setting them up in order to prevent a recurrence of cases like Hyundai Motor. (Yonhap)