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05-30-2006, 11:19 AM
Daewoo Founder Kim Woo Choong Jailed for 10 Years
http://www.bloomberg.com/apps/news?pid=10000080&sid=aQtVx4VA5tbY&refer=asia
May 30 (Bloomberg) -- Kim Woo Choong, the Daewoo Group founder who surrendered to South Korean authorities after six years on the run, was today sentenced to 10 years in prison for his role in a 40 trillion won ($42 billion) fraud.
Kim, 69, who arrived at Seoul Central District Court in an ambulance, will remain in hospital unless he recovers from illnesses including heart disease, Judge Hwang Hyun Ju said, according to a transcript. The judge ordered him to forfeit 21.4 trillion won, ending the country's biggest fraud case.
The prosecution was seen as a test of the government's resolve to clean up Korea's industrial groups, called chaebol, whose debt-fueled expansion led the country to seek a $57 billion bailout from the International Monetary Fund in 1997. This year, the government arrested Chung Mong Koo, chairman of Hyundai Motor Co., who's accused of embezzlement and bribery.
``The verdict shows South Korea's strong commitment against the illegal activities of chaebol groups,'' said Han Sang Soo, who oversees about $1 billion at Tong Yang Investment Trust Management Co. in Seoul. ``It could set an example for the future, including the ongoing case involving Hyundai Motor's chairman.''
Kim built South Korea's second-largest industrial group over three decades before fleeing the country in 1999 when the empire collapsed. Arrested on June 14 last year on returning to Seoul, he was wheeled in and out of court today, wearing hospital pajamas and attached to an intravenous drip.
``Abandoned Corporate Ethics''
Prosecutors accused him of 40 trillion won of fraudulent accounting by Daewoo, illegally borrowing 9.8 trillion won and illicitly transferring $3.2 billion overseas. They sought a 15- year prison term and a 23 trillion won fine.
``Former Chairman Kim abandoned corporate ethics and circumvented the law, pushing Daewoo Group to bankruptcy,'' Judge Hwang said. ``This caused a tremendous amount of public funds to be injected into companies and eventually led to a burdening of the public.''
Kim built a 78 trillion won business group, starting from a textile export business financed with a 5 million won loan from a businessman impressed by his marketing skills. At its peak, the group had 396 business branches abroad, with interests in automobiles, shipbuilding, electronics and financial services.
By 1999, Daewoo owed foreign and domestic creditors 87 trillion won -- the size of the Czech Republic's annual economic output at the time. Daewoo's units were broken up and sold, with a group led by Detroit-based General Motors Corp. acquiring Daewoo Motor, creating GM Daewoo Auto & Technology Co. in 2002.
Age, Illness
Kim is of ``considerable age'' and has ``various diseases,'' Judge Hwang said in his judgment, also naming enterostenosis, a narrowing of the intestine. The former chaebol head has been in Yonsei University Hospital in Seoul.
The court hearing of charges against Hyundai's Chung, accused of embezzling funds from South Korea's largest carmaker to bribe banks and government officials, will begin in Seoul on June 1. Prosecutors say Chung, 68, misused 400 billion won of Hyundai Motor's money and embezzled 120 billion won for a slush fund to bribe government and banking officials.
Korea's family-run industrial groups have also featured in investigations into illegal election campaign donations.
http://www.bloomberg.com/apps/news?pid=10000080&sid=aQtVx4VA5tbY&refer=asia
May 30 (Bloomberg) -- Kim Woo Choong, the Daewoo Group founder who surrendered to South Korean authorities after six years on the run, was today sentenced to 10 years in prison for his role in a 40 trillion won ($42 billion) fraud.
Kim, 69, who arrived at Seoul Central District Court in an ambulance, will remain in hospital unless he recovers from illnesses including heart disease, Judge Hwang Hyun Ju said, according to a transcript. The judge ordered him to forfeit 21.4 trillion won, ending the country's biggest fraud case.
The prosecution was seen as a test of the government's resolve to clean up Korea's industrial groups, called chaebol, whose debt-fueled expansion led the country to seek a $57 billion bailout from the International Monetary Fund in 1997. This year, the government arrested Chung Mong Koo, chairman of Hyundai Motor Co., who's accused of embezzlement and bribery.
``The verdict shows South Korea's strong commitment against the illegal activities of chaebol groups,'' said Han Sang Soo, who oversees about $1 billion at Tong Yang Investment Trust Management Co. in Seoul. ``It could set an example for the future, including the ongoing case involving Hyundai Motor's chairman.''
Kim built South Korea's second-largest industrial group over three decades before fleeing the country in 1999 when the empire collapsed. Arrested on June 14 last year on returning to Seoul, he was wheeled in and out of court today, wearing hospital pajamas and attached to an intravenous drip.
``Abandoned Corporate Ethics''
Prosecutors accused him of 40 trillion won of fraudulent accounting by Daewoo, illegally borrowing 9.8 trillion won and illicitly transferring $3.2 billion overseas. They sought a 15- year prison term and a 23 trillion won fine.
``Former Chairman Kim abandoned corporate ethics and circumvented the law, pushing Daewoo Group to bankruptcy,'' Judge Hwang said. ``This caused a tremendous amount of public funds to be injected into companies and eventually led to a burdening of the public.''
Kim built a 78 trillion won business group, starting from a textile export business financed with a 5 million won loan from a businessman impressed by his marketing skills. At its peak, the group had 396 business branches abroad, with interests in automobiles, shipbuilding, electronics and financial services.
By 1999, Daewoo owed foreign and domestic creditors 87 trillion won -- the size of the Czech Republic's annual economic output at the time. Daewoo's units were broken up and sold, with a group led by Detroit-based General Motors Corp. acquiring Daewoo Motor, creating GM Daewoo Auto & Technology Co. in 2002.
Age, Illness
Kim is of ``considerable age'' and has ``various diseases,'' Judge Hwang said in his judgment, also naming enterostenosis, a narrowing of the intestine. The former chaebol head has been in Yonsei University Hospital in Seoul.
The court hearing of charges against Hyundai's Chung, accused of embezzling funds from South Korea's largest carmaker to bribe banks and government officials, will begin in Seoul on June 1. Prosecutors say Chung, 68, misused 400 billion won of Hyundai Motor's money and embezzled 120 billion won for a slush fund to bribe government and banking officials.
Korea's family-run industrial groups have also featured in investigations into illegal election campaign donations.