Kim, chairman of conglomerate Hanwha Group, was sentenced in July to 18 months in prison. He was temporarily let out last month to receive medical treatment for worsening health conditions brought on by his conviction and jailing.

The appeal court suspended the sentence for three years, meaning if Kim -- who appeared in court wearing a hospital gown -- stays out of trouble for that period he will not have to go to prison.

"The sentence of one year and six months is a bit too heavy," Presiding Judge Kim Deuk-hwan told a packed courtroom at Seoul Central District Court, citing Kim's health condition and a lack of a previous criminal record.

The court ruled July 2 that bodyguards of Kim, the Hanwha chairman, forcibly took bar workers allegedly involved in an altercation with his son to a construction site near the capital, where the tycoon kicked and punched them.

Kim also hit one of the workers with a steel pipe and threatened the victims with an electronic shock device, the July ruling said.

Judge Kim, in handing down the decision Tuesday, said that those attacked did not want Kim to be punished further and noted that the tycoon himself had apologized for the crime.

He also ordered Kim, one of South Korea's richest people, to do 200 hours of community service, some of it at welfare facilities, to ensure that he "contributes to society by repenting and abandoning a sense of enormous privilege."

Park Jong-kook, a spokesman for Hanwha, welcomed the ruling.

"We respect the court's decision," he said. "It's fortunate."

He added that Kim "will concentrate on recovering his health."

The dramatic details of Kim's case drew intense public interest in South Korea, where the heads of family controlled conglomerates wield great economic, political and social clout.

Hanwha was established in 1952 as the Korea Explosives Corp. It later developed interests in petrochemicals, finance, insurance, construction and retail. It also owns the Hanwha Eagles professional baseball team.

The suspension of Kim's prison term is the second such case in less than a week involving a South Korean captain of industry.

Last Thursday Hyundai Motor Co. Chairman Chung Mong-koo had his three-year prison term for embezzlement and breach of trust suspended for five years at the Seoul High Court. The presiding judge said he feared sending Chung to jail would harm South Korea's economy.

Chung was also ordered to do community service and fulfill a promise made last year to donate 1 trillion won (US$1.1 billion; euro774 million) of his personal assets to charity.