Extraordinary corporate governance development in South Korea last week when Hyundai Automotive Group chairman Chung Mong-koo, was handed a surprise three-year sentence for high-profile corruption.

But he won't be going to jail. Not for some time. Convicted for embezzling the equivalent of more than $100 million in company funds to create slush funds and other charges, the automotive boss plans to appeal the ruling. Korean lawyers have told me that process is expected to take anywhere from six months to two years. In the meantime, he has been allowed out on bail and he can continue to run the company. Investors didn't like the decision and sold out immediately after the announcement, although some came back.

More details in The Korea Herald.

Prosecutors had originally sought six years but the court went for the softer option, citing in part the company's work in charities.

Hyundai's problems reflect the cosy nature of big business in Korea, where family ties and personal interests seem to outweigh shareholders' interests and the court's decision seems to be in line with that.

But what about the use of charities to get off the hook? All part of a trend that has seen business chiefs in Asia suspected of impropriety pledging millions of dollars to assuage public outrage at their apparent misdeeds, says Chandran Nair, the founder and chief executive of Hong Kong-based think tank Global Institute for Tomorrow:

"Not all corporate philanthropy in Asia is on shaky moral foundations. But the extent to which companies profit inappropriately then paper over past deeds with charity must be examined.

"Some may argue Asia is only joining the world's game, or it is Asia's turn to thrive with the same freedoms the West enjoyed and exploited to its present advantage. Others may demand Asian business be stripped of everything deemed bad.

"These are extreme views. The balance must come from government and strong, independent legal institutions that punish corporations that cross the line."

Nair's observations are important. Certainly the court last week failed to deal one who crossed that line. It sends a bad signal to Korean investors and society.