South Korean prosecutors raided the headquarters of Hyundai Glovis Co., a logistics unit of South Korea’s Hyundai Motor Group which had been at the heart of a nixed reorganization plan to transform the conglomerate’s structure to a holding entity and set the grounds for hereditary succession, on suspicion of illicit accounting cushioning.

The Incheon District Prosecutors’ Office on Monday said it has seized accounting books and computer files upon police arrest of former Hyundai Glovis employees and executives of two subcontractors on charges of tax evasion and other criminal activities of inflating numbers on tax bills.

Hyundai Glovis’ setback comes after Hyundai Motor Group on Monday announced to withdraw its reorganization scheme to spin off the module and after-sales service businesses of Hyundai Mobis and merge them with Hyundai Glovis due to mounting opposition from shareholders of Hyundai Mobis.

On Wednesday, shares of Hyundai Glovis ended down 4.98 percent at 143,000 won.

Hyundai Glovis, owned 23.1 percent by Hyundai Motor Vice Chair and heir-in-waiting Chung Eui-sun, relies 70 percent of revenue on servicing subsidiaries of the Hyundai Motor family. In 2007, it was fined 900 million won ($835,112) for violating antitrust rules with inside deals reaching 87 percent.

By Ji Hong-goo and Lee Ha-yeon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]