Business bad boys find it's a sorry state of affairs when apologies fail

It has been a good week for the needy in South Korea but not quite such a good one for business.

On Wednesday, scandal-racked Hyundai Motor Group announced a US$1 billion donation to unnamed charities; on the same day, the much-lambasted Lone Star Funds announced a handout to 'society' of US$100 million. Both made public apologies.

With expectations of business ethics rising in South Korea, grovelling apologies and charitable donations are the latest tactics for enterprises taking flak.

'These donations appear to be intended to influence a process that should not be open to influence,' said Hank Morris, a director at Seoul consultancy IRC.

That process is regulatory investigation. Hyundai faces prosecution investigations over a political slush fund and an alleged wealth and corporate power transfer from Hyundai Motor Group chairman Chung Mong-koo to son Chung Eui-sun, president of Hyundai affiliate Kia Motor Corp. Senior executives have already been detained.

Dallas-based turnaround fund Lone Star has long been a media whipping boy. Its alleged sins range from declining to pay taxes on deals struck in South Korea - it invested via offshore havens with dual taxation treaties with Seoul - to manipulating the debts of Korea Exchange Bank.