SEOUL: A South Korean court has sentenced the founder of the Daewoo group to 10 years in prison and forfeited $22 billion for fraud and embezzlement in the country's biggest financial scandal.
Kim Woo-choong, 69, had turned Daewoo into the second-largest conglomerate in the country before fleeing in 1999 as his empire was collapsing under more than $75 billion in debts.
The Seoul Central District Court on Tuesday found him guilty of fraud in securing bank loans, fabricating financial accounts to falsify assets and embezzlement of company funds.
The court ordered him to pay a 10 million won criminal fine. “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, such as fabricating the accounts or obtaining fraudulent loans,” Judge Hwang Hyun-joo said when sentencing Kim.
Last year prosecutors charged Kim with illegally procuring loans of about 10 trillion won, taking about $20 billion in Daewoo funds through overseas accounts and helping doctor Daewoo's books to falsify assets of about 41 trillion won.
The prosecution had sought a 15-year prison term and 23.2 trillion won in forfeiture.
Kim, who has been hospitalised for a heart ailment, walked into a courtroom packed with 200 people wearing a hospital gown and with an intravenous needle in his arm. The court ordered a suspension of the sentence until July 28 given his health.
Kim has one week to file for an appeal, the court said.
The Daewoo founder returned to South Korea in June last year, saying he wanted to make peace with his past. Kim was taken into custody at the airport upon arrival on a flight from Vietnam.
In 1999, the South Korean government took control of Daewoo's debts. Then a multinational giant in civil engineering, automobiles and shipbuilding, Daewoo splintered into a clutch of businesses after its 1999 collapse.
Firms such as Daewoo were instrumental in rebuilding the economy in the years after the 1950-53 Korean War, but shady business practices and unrestrained borrowing were later partly blamed for leading to the financial crisis of the late 1990s.
Several leading executives at other family-owned South Korean conglomerates, known here as chaebol, have been the subject of criminal probes in recent months.
Last month, prosecutors indicted Hyundai Motor group Chairman Chung Mong-koo on charges of embezzling funds and causing losses at group companies by forcing them to support weaker affiliates.
Chung was arrested in April.
