April 20, 2024

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[THE INVESTOR] Hyundai Motor Group on Jan. 20 denied allegation that it deliberately overpaid a supplier run by an associate of Choi Soon-sil, the president’s longtime confidante who is the key figure in the ongoing influence-peddling scandal.

“When we researched the market price of the absorbent materials used for machineries, it ranged from 5,800 won (US$4.96) to 6,200 won per kilogram. KD Corp. first suggested 5,500 won, but after negotiations, we decided on a final price of 5,350 won,” said Hyundai Motor. 

Earlier, Hyundai was accused of paying 10 percent more than the market price of the absorbent that is priced at around 4,000 won, to deliberately benefit the midsized firm that has ties with Choi, in return for business favors.

The automaker also denied it was pressured by President Park Geun-hye to give contracts to KD Corp. in the first place, saying purchasing the material from the firm was necessary for the automaker to improve efficiency in production. The deal was completed after comparing the product with other competitors, Hyundai said.

During the hearing of the impeachment trial of the president, An Chong-bum, a former senior presidential secretary for policy coordination, however, testified he urged Hyundai Motor Group officials in 2014 to strike a supply deal with KD Corp., on behalf of the president.

Following An’s request, Hyundai Motor had clinched a deal with KD Corp. amounting to 1.05 billion won (US$897,099) from February 2015 to September this year, without conducting due diligence or further quality control tests.

Choi, in exchange for her business favors, received a Chanel bag priced at 11.62 million won in 2013 and cash totaling 40 million won in 2015 from the head of the KD Corp., who is the father of a friend of Choi’s daughter Chung Yoo-ra.

Choi, however, denied receiving cash or gifts from KD Corp. as kickbacks.

By Ahn Sung-mi (sahn@heraldcorp.com)