The indictment of Hyundai Motor Group chairman Chung Mong-koo on Tuesday sent shock waves through the executive ranks of South Korea's largest - and the world's seventh-largest - carmaker at a time when the country's car industry faces multiple challenges.
While the two largest players, Hyundai Motor and affiliate Kia Motors, are grappling with the absence of their group chairman, the sector as a whole - which is rounded out by GM Daewoo Auto and Technology, Ssangyong Motor and Renault Samsung Motor - is watching in dismay as the ever-strengthening won hurts their exports, the domestic automotive market remains weak and the perennial issue of militant labour is raising its head during the annual collective bargaining season.
Chung, who was detained on April 28, was formally charged on Tuesday with breach of trust and misuse of company funds - charges related to alleged slush funds the company created to buy political favours and to murky wealth transfers to Chung Eui-sun, his only son and president of Kia.
The younger Chung remains at large but is also expected to be indicted and faces an exit ban from the country.
'We are very concerned at developments. Many things are being delayed,' said Hyundai spokesman Oles Gadacz. 'The chairman has one foot in the detention centre and one foot in the boardroom - he is allowed one visitor for 15 minutes a day - and nobody here wants to pre-empt his decisions.'
While Czech government officials in Seoul on Thursday signed a contract with Hyundai on the carmaker's 300,000-unit capacity plant in the country, the actual start of construction of the Euro1.1 billion ($10.9 billion) plant awaits the chairman's seal of approval.