Hyundai chief visits North Korea over detained worker

By Jon Herskovitz

SEOUL (Reuters) - The head of South Korea's Hyundai Group went to North Korea on Monday seeking to win the release of a company worker whose nearly five months' detention has worsened already strained ties between the rival Koreas.

The trip comes after former U.S. President Bill Clinton flew to Pyongyang last week where he met North Korean leader Kim Jong-il to secure the freedom of two U.S. journalists held since March after being accused of illegally entering the reclusive communist country.

Officials at the massive Hyundai Group, which for years has sought to do business in the North, are hoping North Korea will follow its release of the journalists by freeing the worker, whose family name is Yoo, the South Korean daily JoongAng Ilbo quoted company and government sources as saying.

Yoo, a Hyundai worker who has been held since late March on North Korean allegations he insulted the state's communist leaders, could be freed as early as this week, local media quoted government sources as saying.

"I will try to have Mr. Yoo released," Chairwoman Hyun Jeong-eun told reporters in a brief comment before starting on her three-day visit to Pyongyang.

Hyun is one of the few South Korean executives to have previously met Kim Jong-il and did not say if she would have another round of talks with the North Korean leader.

The release could ease friction on the Korean peninsula and assuage concerns among investors that tensions might spark a conflict in the economically vital Northeast Asia region.

Yoo has been held at a joint factory park where he worked in the North's border city of Kaesong. The park is run by Hyundai Group affiliate Hyundai Asan and that company's president went on a separate trip to the industrial park on Monday for discussions on the worker.

SOLE JOINT PROJECT

The park, where about 100 South Korean firms use cheap North Korean labor and land to make goods, is the only major joint economic project left between the two Koreas, who share one of the world's most militarized borders.

Shares in South Korean companies that have been operating businesses with or in North Korea jumped in early trading on Monday on news of the visits.

"The news stoked investors' hopes that businesses with the North could be revived if the two Koreas resume talks," said Shin Min-seok, an analyst at Daewoo Securities.

Relations between the rival Koreas have worsened in the past year after South Korean President Lee Myung-bak ended unconditional handouts to the impoverished state and linked aid to moves the North makes to decrease its military threats.

The release of the two U.S. journalists has increased pressure on Lee to free the Hyundai worker and more than 1,000 other South Koreans in the North who were either kidnapped by the state or not released after the 1950-53 Korean War ended.

(Additional reporting by Christine Kim and Shin Ji-eun; Editing by Jonathan Hopfner and Sanjeev Miglani)