SEOUL, Feb 5: A South Korean court on Monday sentenced the head of the Hyundai Motor Group to three years in jail, sweeping aside widely-held expectations of a suspended sentence.

The ruling, which should rekindle concerns over a management vacuum at the world's No. 6 auto maker, is another blow for a company contending with a rising won and restive labour unions.

Officials at Hyundai Motor declined to comment, while share market analysts anticipated hefty consequences from the ruling.

“This could have a big impact on Hyundai Motor,” said Kim Hyun-tae, fund manager at Landmark Investment Management.

“The impact on the Korean economy could be huge. There will likely be an appeal, so this process could take longer.”

Chung Mong-koo, 68, was arrested last April on allegations that Hyundai and its affiliates set up slush funds to pay for political favours.

“The court decided a strict execution of law is necessary to eradicate illegal and anti-market practices in the past and help South Korea build a more advanced economy,” Kim Dong-oh, presiding judge at Seoul Central District Court, said.

Prosecutors last month demanded a six-year jail term for Chung whose post-World War II auto-repair shop burgeoned into a sprawling conglomerate.-—AFP