Daewoo Founder Sentenced to Prison Term

[69Firebird400]

Daewoo Founder Kim Gets 10 Years in Jail

By Lee Hyo-sik
Staff Reporter

The Seoul Central District Court Tuesday sentenced Kim Woo-choong, founder of the now-defunct Daewoo Group, to 10 years in prison and 21.4 trillion won ($22.6 billion) in fines for accounting fraud and other financial irregularities.

But the court acquitted him of charges of bribing politicians and other influential figures to bail out his troubled conglomerate following the 1997-98 Asian financial crisis.

``We find Kim responsible for breaching corporate ethics and orchestrating the country's largest financial scandal that led the Daewoo group to collapse, forcing many workers out on the street,'' the court said in the ruling.

``His irresponsible acts also caused significant damage to the nation's financial sector that needed a large amount of public funds from taxpayers,'' it added.

But the court did not order Kim to be sent back to prison. He has been hospitalized at Yongdong Severance Hospital in southern Seoul due to heart and other medical problems.

Kim's attorneys expressed disappointment at the ruling, saying they will appeal the case.

``It is frustrating that the court did not consider Kim's contribution to the development of the economy,'' they said.

The lawyers had insisted that Kim should not be held solely responsible for Daewoo's demise, since it was also a product of the government's poor economic policies that brought upon the currency crisis in the late 1990s.
But prosecutors said Kim should be subject to severe punishment, arguing he caused strains to the economy through the company's unreasonable expansion and irresponsible management, which cost 30 trillion won in public funds.

Early this month, the prosecution asked for a 15-year prison sentence and a fine of about 23 trillion won. Last July, prosecutors indicted Kim on charges of orchestrating accounting fraud by inflating the assets of four Daewoo subsidiaries by 20 trillion won to borrow some 10 trillion won in bank loans between 1997 and 1998.

He was also suspected of embezzling about 20 trillion won and violating the foreign exchange transaction law by smuggling the money out of the country.

Investigators brought additional charges against Kim for embezzling 114 billion won and accused him of using $6.26 million to buy artwork and $2.73 million for home purchases and other family living expenses.

Once Korea's second-largest industrial group, Daewoo collapsed in July 1999 under the weight of $80-billion debts and was placed under a government-led restructuring program.

After Daewoo's collapse, the government spent around 30 trillion won in public funds to bail out Daewoo units, including Daewoo Engineering & Construction.

Kim returned to Korea from Vietnam last June after a nearly a six-year exile abroad to face criminal charges and was arrested upon his arrival at Incheon International Airport.

Last April, the Supreme Court sentenced seven former Daewoo executives up to five years in prison and fined them a total of 23 trillion won for accounting fraud and embezzlement.

http://times.hankooki.com/lpage/2006...7131310440.htm

[doh]

http://biz.yahoo.com/ap/060530/skore...nder.html?.v=5

Court Orders 10-Year Prison Term for Founder of Collapsed Daewoo Group


SEOUL, South Korea (AP) -- A Seoul court on Tuesday sentenced the founder and former chairman of collapsed conglomerate Daewoo to 10 years in prison for a range of charges including embezzlement and accounting fraud.

The Seoul Central District Court said it also ordered Kim Woo-choong, 69, to forfeit more than 21 trillion won ($22 billion) and pay a fine of 10 million won ($10,600).

Kim was indicted in June last year on charges of multi-trillion won accounting fraud, illegal financing and diverting funds out of the country. He was also accused of embezzlement and breach of trust.

A severe sentence was "unavoidable" since Kim was engaged in activities that contributed to Daewoo Group's bankruptcy and hurt South Korea's image abroad, the court said in the ruling.

"It is doubtful whether (Kim) is truly repentant as he tries to dodge the responsibility and justify his actions," the ruling said.

It wasn't immediately known whether Kim would appeal the ruling.

He was found guilty of the charges, including over 20 trillion won in accounting fraud, 9.8 trillion won worth of illegal financing, and diverting 19 trillion won out of the country, Judge Nho Yu-kyong said. He was also found to have embezzled $100 million, she said.

Kim started as a textile salesman in 1967, building an empire that came to stand among the largest conglomerates, or "chaebol," in South Korea.

Daewoo collapsed under massive debts in the wake of the 1997-98 Asian financial crisis, when the South Korean government was forced to accept a $58 billion International Monetary Fund bailout.

Parts of Daewoo were broken up and sold, with Detroit-based General Motors Corp. acquiring a major stake in Daewoo Motor to create GM Daewoo in 2002.

Kim fled the country in 1999, living mostly in France, until returning to South Korea last June to face charges

[paul8488]

Merged these two similar threads. Wonder if he'll share a cell with L'il Kim?