Hyundai Motors, Czech govt sign pact on $1 bn car factory

Prague, May 18 | Updated: May 19 2006, 05:47am hrs
Hyundai Motor Co and the Czech government signed an agreement on Thursday for the South Korean automaker to build a $1 billion car factory, the construction of which has been indefinitely postponed due to the arrest of Hyundai Motor chairman Chung Mong Koo.

The Czech Republics industry and trade minister Milan Urban and Hyundai Motor vice chairman Kim Dong Jin signed a final agreement to build the plant in Nosovice, an industrial zone 320 kilometers east of Prague, ratifying an initial agreement on March 27, the company said in a statement. The signing was not open to the press.

We had initially planned to hold a signing ceremony in Prague on May 16, with Chairman Chung Mong Koo and the Czech prime minister Jiri Paroubek attending, followed by a ground breaking ceremony the next day, said Hyundai Motor spokesman Park Sang Woo.

The construction of the plant is on hold due to the absence of the chairman, he added.

Mr Chung was indicted on May 16 on charges of embezzling funds and misusing company money to bribe government and banking officials. Prosecutors have also place travel bans on 10 Hyundai Motor executives, including Mr Chung and his son Chung Eui Sun, forcing the group to delay some of their overseas ventures.

Kia Motor, run by Chung Eui Sun, has also indefinitely postponed a similar ceremony for a plant in West Point, Georgia.