By Na Jeong-ju
Staff Reporter


Former Hyundai Asan CEO Kim Yoon-kyu diverted 1.1 billion won in corporate funds in the course of conducting inter-Korean tourism projects, Hyundai Group said Friday.

Releasing the results of its in-house inquiry into what the company describes as Kim’s embezzlement, Hyundai said the disgraced CEO stashed some 820 million won in slush funds by inflating costs needed for construction projects on Mt. Kumgang in North Korea. He also used some 300 million won in corporate funds for private purposes, it said.

Kim also faces allegations that he diverted billions of won in government funds set aside to promote inter-Korean businesses with rumors suggesting Kim funneled a part of the diverted money into North Korea. Hyundai Asan officials said the company has financial records that prove Kim used the government funds illegally.

The announcement came as North Korea demanded the reinstatement of Kim, who was dismissed by Hyundai chairwoman Hyun Jeong-eun as head of Hyundai’s North Korean business arm over the embezzlement charges.

Hyundai Asan officials said the prosecution may open an investigation, adding the company will refer the case to the prosecutor’s office soon.

``We have hard evidence showing that Kim misused millions of dollars for his interests,’’ Hyundai said. ``We have decided to disclose his wrongdoings for the good of the South-North cooperation projects. We believe the inter-Korean projects should proceed on the basis of transparency and morality, and therefore Kim is not suitable.’’

Hyundai’s action may keep up the pressure on Pyongyang to return to discussion with Hyundai over the inter-Korean tour programs.

North Korea and Hyundai, which holds the exclusive rights for the development of tour programs, earlier agreed to expand their tour projects and to arrange South Korean tours to Kaesong City and Mt. Paektu in the North.

The North, however, delayed the tour programs after Hyun dismissed Kim as Hyundai Asan CEO. It also cut the number of South Korean visitors to the Mt. Kumgang resort complex, demanding Kim’s reinstatement.

Hyun earlier said the group is now at a crossroad and have to determine whether to continue the North Korean business, adding the decision is not only up to the company.

Displeased with Kim’s dismissal, North Korea gave the chairwoman the cold shoulder when she visited the Mt. Kumgang tour resort earlier this month.

jj@koreatimes.co.kr