Hyundai's Kia Motors has further expansion plans

Kia's president Chung Eui-sun is the son of Chung Mong-koo, the Hyundai Motor group chairman who is being tried for embezzling 103.4bn won (�59m).

However, Kim Dong-jin, Hyundai's vice chairman and three other executives have been indicted.

Chung Mong-koo had been accused of transferring funds to his son.

Expansion plans

"We decided not to indict Chung Eui-sun because, from a legal point of view, Chung Mong-koo has final responsibility," said Kang Chan-woo, a spokesman for the Supreme Prosecutors' office.

"There is something too harsh in indicting the son when the person responsible for the wrongdoing has already been arrested and indicted," he added.

Mr Mong-koo has been accused of creating slush funds to pay politicians and officials for business favours.

He has already confessed to some of the charges, said the spokesperson, but did not reveal details.

Plans to build a car factory in the Czech Republic, as well as a plant in the US state of Georgia, have been put on hold since the scandal hit the headlines.

Hyundai, the world's seventh largest car firm, aims to be among the world's top five car firms by 2010, but a lack of direction could threaten this, say analysts.

Kia shares were 1.9% higher while Hyundai Motors shares rose 1.87%.