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(LEAD) Hyundai Motor belatedly reports disputed donations to board

All News 15:45 February 08, 2017

(ATTN: REWRITES throughout to highlight Hyundai Motor's reporting of donations to board; RECASTS headlines)

SEOUL, Feb. 8 (Yonhap) -- South Korea's top automaker Hyundai Motor Co. reported cash gifts made to two controversial foundations between 2015-16 to its board months after the donations were made, sources said Wednesday.

In November 2015 and four months later, 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's in-house transparency panel listed the donations on the agenda of board meetings in January and July last year as a mere formality and it didn't disclose them in regulatory filings as it was not mandatory.

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.

The headquarters of Hyundai Motor Co. and Kia Motors Corp. in southeastern Seoul. (Yonhap file photo)

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.

"Only donations exceeding a certain amount are reported to the board via the committee. The donations were a matter of arbitrary decision by the CEO," a Hyundai Motor official said.

Meanwhile, 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 local big businesses should ramp up efforts to enable in-house transparency watchdogs to serve their intended purpose instead of just setting them up.

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