Daewoo founder jailed for fraud

The founder of Daewoo has been jailed for 10 years and must forfeit $22 billion after being found guilty in South Korea’s biggest financial scandal.

    Kim has a week to appeal

    Kim Woo-choong was convicted of  securing illegal bank loans, fabricating accounts to falsify assets and embezzling funds from the cars-to-engineering conglomerate.

    Hwang Hyun-joo, the judge presiding at Seoul central district court, said in his summary: "There is a need to show that there is a heavy penalty to pay when you commit acts that betray the trust of economic entities."

    The court also ordered Kim to pay a $10,600 criminal fine.

    Last June, Kim was taken into custody at Seoul Airport after arriving from Vietnam.

    The prosecution, which sought a 15-year prison term and $24,600 in forfeiture, accused Kim of illegally securing loans of about $10.6 billion, taking about $20 billion in Daewoo funds through overseas accounts and helping falsify company asset books to the tune of about $43.6 billion

    Kim has a heart disorder and, because of this, the court suspended the sentence until July 28 and has given him a week to appeal.

    Kim had turned Daewoo into the country’s second-largest company before fleeing in 1999.

    Splintered

    Daewoo collapsed in the same year and splintered into a clutch of businesses with the government taking control of their debts.

    Several executives at other family-owned South Korean firms, known as chaebol, have been investigated in recent months.
       
    Last month prosecutors indicted Chung Mong-koo, the chairman of Hyundai, on charges of embezzling funds and causing losses at the car group's companies by forcing them to support weaker affiliates.

    SOURCE: Reuters


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