Daewoo dissolution and corruption scandal

The Daewoo dissolution and corruption scandal was a 1999–2006 scandal in South Korea involving the bankruptcy of Daewoo, then-country's second largest company, and a subsequent corruption investigation, involving arrests, escapes and eventual conviction of dozens of company's top executives. The resulting scandal has been described as one of the biggest scandals in South Korea.[1]

Background edit

Daewoo was a major South Korean conglomerate. Prior to the Asian financial crisis, Daewoo was the second largest conglomerate in Korea. By 1999, Daewoo went bankrupt, with debts of about US$50[2]-80 billion.[1]

Corruption scandal edit

Soon after the demise, South Korean prosecutors filed charges against over 40 top executives, in what BBC described as the Daewoo corruption scandal.[3] This was related to the discovery that company's auditors concealed the amount of debt, and that bribes of about 470 billion won were involved (close to US$400 million). Loss from bribery and corruption has been estimated to over US$1 billion.[1]

Daewoo Chairman Kim Woo-choong fled to Vietnam, and former Daewoo factory workers put up "Wanted" posters with his picture. Kim returned to Korea in June 2005 and was promptly arrested. He was charged with masterminding accounting fraud of 41 trillion won (US$43.4 billion), illegally borrowing 9.8 trillion won (US$10.3 billion), and smuggling US$3.2 billion out of the country.[4] On 30 May 2006, Kim was sentenced to 10 years in prison after being convicted of fraud and embezzlement.[5] On the last day of the trial, Kim tearfully addressed the court, "I cannot dodge my responsibility of wrongly buttoning up the final button of fate."[6] On 30 December 2007, Kim was granted amnesty by President Roh Moo-hyun.[7]

See also edit

References edit

  1. ^ a b c Dowling, John Malcolm (2008). Future Perspectives on the Economic Development of Asia. World Scientific. p. 305. ISBN 978-981-270-609-6.
  2. ^ "The death of Daewoo". The Economist. 19 August 1999. Retrieved 13 October 2015.
  3. ^ "Daewoo corruption scandal deepens". BBC News. 2 February 2001. Retrieved 28 August 2018.
  4. ^ "Daewoo founder Kim gets 10-yr term". CNN. 30 May 2006. Archived from the original on 8 April 2008. Retrieved 20 November 2008.
  5. ^ "Daewoo founder sentenced to 10 years in prison". www.atimes.com. Asia Times Online. 1 June 2006. Archived from the original on 1 September 2006. Retrieved 6 July 2016.{{cite web}}: CS1 maint: unfit URL (link)
  6. ^ Ramstad, Evan (31 May 2006). "Daewoo Founder Gets Prison Term". Online.wsj.com. Retrieved 20 November 2008.[permanent dead link]
  7. ^ "S.Korea pardons Daewoo founder, death-row inmates". Reuters. 31 December 2007.