Hyundai chief faces resentencing after court ruling

SEOUL (Reuters) - South Korea's Supreme Court on Friday overturned a court ruling on a suspended jail term for Hyundai Motor Group (005380.KS) Chairman Chung Mong-koo, which could lead to his resentencing for fraud and embezzlement.

The Supreme Court's decision was a surprise move in a country seen as lenient on white-collar crime. Prosecutors, who had been seeking a stiff jail term for Chung, had appealed after he was given a suspended, three-year jail sentence late last year.

"We reversed all of the (lower court's) rulings on the accused and decided to send the rulings back to the lower court for a review," said the Supreme Court statement obtained by Reuters.

Supreme Court spokesman Oh Suk-joon said by telephone that Chung will be sent back to the High Court for a review of his sentence.

"It's not a matter of whether he is guilty or not, but about the sentencing," Oh said.

Prosecutors had been pressing for Chung to serve up to six years in jail. He spent two months in prison in 2006 before being released on bail.

In September, Seoul's High Court handed down the suspended sentence for fraud to Chung, leaving him free to run the world's sixth largest auto manufacturing group.

Instead of a jail term, Chung was ordered to make an 840 billion won ($861.3 million) donation, previously pledged by the family. He also had to deliver speeches about transparent management and to write essays about governance to be published in domestic media.

An official at the High Court told Reuters it had yet to decide when to open the review on Chung.

The Supreme Court ruling came after Samsung Group Chairman Lee Kun-hee appeared at prosecutors' offices on Friday for a second time after the powerful businessman last week answered questions in a probe of corruption at the corporate giant.

Hyundai expressed regret at the Supreme Court decision.

"We are very confused and puzzled as the court will resume the case while we have so many business issues," Hyundai spokesman Jake Jang said by telephone.

However, investors largely ignored the decision with analysts expect it would not affect the company's business.

Hyundai's shares were up 4.71 percent to close at 82,300 won, easily outperforming a 0.85 percent rise in the broader market .

($1=975.2 Won)

(Reporting by Cheon Jong-woo and Kim Yeon-hee; Editing by Keiron Henderson)