Fugitive ex-Daewoo chief arrested

The former chairman of collapsed South Korean conglomerate Daewoo Group was arrested to face fraud charges worth US$74 billion after living abroad on the run for nearly six years.

Kim Woo-choong is accused of falsifying Daewoo's accounts
Kim Woo-choong is accused of falsifying Daewoo's accounts

Kim Woo-choong, who fled South Korea in 1999, is accused of having falsified Daewoo’s accounts to draw billions of dollars in illegal bank loans before diverting them overseas.

He has come to epitomise the excesses of the country’s “chaebol” – the privately controlled conglomerates whose unbridled expansion on borrowed money helped undermine the economy in the 1990s.

“I will take whatever responsibility I am supposed to take over the Daewoo Group incident. I feel deeply sorry,” the bespectacled, white-haired tycoon said at Incheon International Airport near Seoul before being whisked away to the Supreme Prosecutors’ Office.

Kim faces charges of 41 trillion won ($40.2 billion) in accounting fraud, obtaining 9.2 trillion won ($9.1 billion) in illegal financing and diverting 25 trillion won ($24.7 billion) out of the country.

Court rulings upheld

The Supreme Court in April had upheld lower court rulings against several former Daewoo executives accused of collaborating with Kim.

“I will take whatever responsibility I am supposed to take over the Daewoo Group incident. I feel deeply sorry”

Kim Woo-choong,
Former Daewoo chairman

The 69-year-old Kim arrived on a flight from Hanoi, and was immediately surrounded by dozens of prosecution and security officials who jostled with a crowd of awaiting journalists.

Protesters from civic groups, political parties including the Democratic Labour Party and former Daewoo Motor employees chanted “Prosecute Kim Woo-choong! No Amnesty! Hold Parliamentary Hearings!” The shouting intensified as Kim emerged from the arrival gate.

Kim walked out along a police cordon, invisible to the former Daewoo executives who had lined up to catch a glimpse of him.

Police at one instance stopped an unidentified man who attempted to hurl himself toward Kim just before the Daewoo founder was to get into a police car.

French citizenship

Police believe Kim had been travelling in Europe since leaving South Korea, and that he acquired French citizenship during his sojourn.

He left the country in October 1999 before charges were prepared, first heading for a Daewoo auto component factory in Yantai, China.

Speculation was intense regarding the timing of Kim’s return.

Kim says he will takeresponsibility

Kim says he will take

“He feels it is time to take responsibility, and also clarify what needs clarification,” said Baik Kee-seung, a former Daewoo executive who remains close to Kim.

Baik said that Kim has undergone intestinal surgery and suffers from a heart problem.

Kim could potentially face a maximum sentence of life in prison, though given his age, former stature in South Korea and public expression of remorse upon arrival it’s doubtful he would serve much time if convicted.

Kim’s background

The rise and fall of Kim, who started as a textile salesman in 1967, personified South Korea‘s economic growth of the 1970s.

The country’s former military governments provided cheap loans and tax benefits to nurture Daewoo and a handful of other family-run businesses into conglomerates that mass-produced for export markets.

At its peak, Kim’s empire had interests in auto making, shipbuilding, textiles, electronics and other goods.

The collapse of Daewoo and other conglomerates during the Asian crisis forced South Korea to accept an $58 billion International Monetary Fund bailout.

Parts of Daewoo were sold off after the collapse. Detroit-based General Motors Corporation acquired a majority stake in the now-defunct Daewoo Motor, creating GM Daewoo in 2002.

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