Mumbai: A South Korean court has sentenced Hyundai Motor Corporation chairman and South Korea''s richest man Chung Mong-Koo to three years in prison for embezzling funds that were used for illegal political donations.

Chung, 68, was also found guilty of breach of fiduciary duty, Judge Kim Dong Oh of the Seoul Central District Court said. Chung can appeal the verdict and will be allowed to remain out on bail, the judge said.

H ead of the Seoul-based carmaker, the world''s sixth largest auto firm, Hyundai, Chung Mong-Koo, was expecting a suspended sentence.

Chung has been on trial on charges, including embezzlement of company funds, incurring losses at group companies and operating slush funds.

Chung''s lawyers said they were considering whether to appeal Chung will continue to run the company while he appeals, the South Korean company said. However, a second trial and court restrictions on his overseas travel may hamper Chung''s expansion plans for Hyundai Motor and affiliate Kia Motors Corporation.

Chung is worth at least $2.2 billion, based on equity holdings.

Hyundai Motor and Kia are fighting falling returns amidst an 8.6 per cent rise in the value of the won against the dollar affected its overseas competitiveness against Japan''s Honda Motor Company and Toyota Motor Corporation.

Chung together with his employees had set aside 103.4 billion won ($110.5 million) without proper accounting and used 69.6 billion won for illegal political donations> The funds were also used for undercover bonus payments to employees and on an international expo in the city of Yeosu.

During his trial, Chung testified that he knew funds were being diverted without proper accounting but he said he was unaware of the purpose.

The judge awarded suspended sentences to vice chairman Kim Dong Jin, chief financial officer Lee Jung Dae and vice president for procurement Kim Seung Nyun, all of whom were also charged with embezzlement.