Literary crimes of the Daewoo chief
Every Street Is Paved with Gold: The Real Road to Success by Kim
Woo-choong Buy this book
[Note: Daewoo Group founder Kim Woo-choong, 69, confessed this week in a
Seoul court to many of the fraud-related charges against him. Charges include
suspicion that he directed the manipulation of accounting figures of US$21
billion and remitted $15.7 billion in foreign currency abroad without
permission from the authorities. Daewoo collapsed six years ago under its
multi-billion debt and went into government-led restructuring.]
Reviewed by James Card
After five years and eight months in exile as a laxly pursued fugitive, Kim
Woo-choong returned to the motherland in June to face charges of political
payoffs, illegal loans and accounting fraud.
There is one charge that is missing from the list, and that is being a literary
In 1989, Kim penned a book in Korean called The World Is Big and There's Lots to
Do. It was required reading for all employees of the Daewoo empire. It
was the company Koran, the chaebol bible, and in 1992 it was translated
into English and published as, Every Street is Paved with Gold: The Real Road to
It's one of the books that never should have been written and should be tossed
on a shelf with such titles as On Humanity and Human Rights by North
Korean leader Kim Jong-il, Corporate Transparency Ethics by former Enron
CEO Kenneth Lay and The Guide to Marital Fidelity by former US president
On July 1, South Korean prosecutors indicted Kim for accounting fraud,
obtaining illegal bank loans and laundering $25 billion through a secret
British front corporation. Early in his book, Kim writes, "Business is more
than making money; losing less money is sometimes important, too." He also
wrote, "In business, you can't just add one and one and get two. You have to
see one turning into 10, and 10 turning into 50. That's the way to count in
business." He is believed to be responsible for the largest accounting fraud in
history, bigger than Enron and WorldCom. When Daewoo tanked with $80 billion in
debt, Kim fled the country.
The book opens with his hardscrabble upbringing as a newspaper boy, and it's a
point he returns to often throughout the book. His meanderings into his
childhood past are meant to show how he overcame the odds by hard work and
clever thinking. Kim fails to mention that he had it better than most upstart
entrepreneurs in those days. He was the son of a provincial governor who
earlier was former president Park Chung-hee's schoolteacher. Kim went to the
well-regarded Gyeonggi middle and high schools and graduated from Yonsei
University. Later on as Daewoo progressed as an expanding textile company, Kim
received his fat slice of cheap bank loans, corporate favors and textile export
quotas from Park. Back in those days, the garment-textile industry was a
euphemism for sweatshop.
Written at the height of his megalomania, much of the book is heavily laden
with braggadocio and many vapid paragraphs are nothing more than a shopping
list of his accomplishments. "My name has consistently been on the list of top
money-makers in Korea since I started business. And the fact that I am often
listed among top entrepreneurs internationally testifies to my money-making
abilities." He takes pride in doing business with North Korea, as if doing
business with one of the world's worst tyrants is something to be proud of -
something the Hyundai public relations team hasn't figured out yet either.
Other chapters of the book are fusion of commonplace self-help books and
biz-whiz guides of times past. He rambles on about the importance of pioneering
and creativity, but Daewoo was once called a "me, too" company, riding the
shirt-tails of other chaebol into new markets with the same products.
Daewoo invented and innovated nothing and was notorious for copying and
reengineering various products ranging from the Chairman luxury sedan (Mercedes
Benz E class) to the E-Power computer (iMac) to the DP52 pistol (Walther PP).
Turning to the chapter on "What to Do with an Employee Who Gambles Away the
Company's Money" would make a Daewoo stockholder's stomach turn. Kim tells of
an anecdote where an overseas Daewoo employee lost $10,000 of company money at
a casino. He wasn't fired. "But I had good reason for keeping him: if he had
the confidence to beat a casino dealer, then I want him to use it to create
business." Casino dealers can be beaten in the short streak, but the house
always wins in the long run. Kim was a gambling junkie on the global market
with an abnormal line of credit, wheeling and dealing with other people's money
when basic rules of accounting and accountability, transparency and simple
mathematics didn't apply.
Another passage that would make a shareholder raise an eyebrow is how Kim
relates a superstitious technique for building entrepreneurial confidence. It
is written with all earnestness. Since nine is his lucky number, Kim would have
his chauffeur drive in circles as he computed automobile license plate numbers.
If he arrived at many sums ending with nine, then it was a good day to do
business. If not, the chauffeur kept driving and Kim kept counting nines. And
the investors counted nines in the negatives: some 347,000 minority
shareholders in South Korea have lost more than $3 billion.
In the chapter with the tantalizing title "How to Avoid Long Business
Meetings", Kim likes to think that he understands American business culture.
"In the United States, decisions are made by groups of managers, not by a top
executive. That is why American executives have so many meetings." After this
display of stunning ignorance, Kim puts forth his idea on the decision-making
process: in short read as few reports as possible, make autocratic decisions
and leave the minor ones for the executives to figure out.
He dedicates a chapter to the old Chinese chestnut "in crisis there is
opportunity", shtick and peppered throughout the book and taking up a single
page are insipid maxims of the entrepreneur-sage poseur. Most are banal and
obvious: "A little help can be invaluable." Others are bizarre faux Asian
proverbs: "Rice has to be in a bowl to be eaten. Once it touches the floor it
becomes inedible." That is supposed to mean everything should be in its proper
place, including people: "Students should be students, parents should be
parents, workers should be workers and entrepreneurs should be entrepreneurs;
social problems arise when they are not." Evidently Kim could never fathom a
single mother working as an office clerk, taking evening college classes and
owning an online retail store - something not so uncommon in South Korea today.
Before Kim's return and arrest, the local media reported on politicians fearful
of being named in one of Kim's bygone payoffs. Kim was in the bribery and
influence-peddling game early on in his career at Hansung Industrial. In charge
of filing company papers at the bank, Kim sold discounted Italian fabric to the
bank employees for favorable treatment. He wrote, "They liked the new fabric as
well as the price - and at the same time we were clearing out the company
warehouse. From then on, the papers I brought to the bank got top priority." To
wit, that is in the chapter titled "The Importance of Innovation". Later Kim
graduates to bribing two Millennium Democratic Party lawmakers and the Incheon
mayor then receives a suspended prison sentence in 1996 for illegal political
contributions to former presidents Chun Doo-hwan and Roh Tae-woo.
Kim contradicts himself numerous times throughout the book. He says he is not
interested in movies or family life or golf, but later writes, "You need a
variety of interests and a lot of good common sense. You have to be, in
addition to an expert, well-rounded." Such are his obtuse views on
generalization versus specialization. He writes of his desire to be known for
one singular quality item, "It does not matter what it is, as long as they say
that it was made by Kim Woo-choong and that it is the best of its kind." Yet
Kim hustles Daewoo into disparate industries, from making tractors and
microwaves to logging Myanmar forests, and fails to achieve specialized
greatness in one recognizable product. As one auto critic once said, "Daewoo?
The chapter "Why Executives Should Live Below their Means" is a hollow attempt
at explaining his thrift and frugality. Proud of flying economy class, once Kim
gets bumped into business class he doesn't go back to the cheap seats. "After
flying first class, I discovered it was really difficult returning to the back
of the plane. Now I pay to fly first class."
The greatest contradiction has only recently been revealed. Throughout the
book, Kim blathers on about business as nation-building and how his sacrifices
for Daewoo serve the country. It is the businessman as patriot jive - a
hackneyed theme in many of South Korea's chaebol. In June, Kim applied
to reclaim his South Korean citizenship. Back in 1987, Kim became a French
citizen and South Korea doesn't allow dual citizenship. As a Frenchman, he
captained the Daewoo conglomerate and was the chairman of the Korea Football
Association and the Federation of Korean Industries.
One of the most disturbing themes in the book is Kim's twisted views on his
family life and how he and his managers must sacrifice this for the greater
good of the Daewoo universe. "At times I have forgotten not only my wife's and
children's birthdays, but my own as well." Kim continues to say that he loves
his work and he pours himself into his work and that work is more enjoyable
than anything else. "Since I started to work, I have never taken a day off and
I do not recall ever having even gone to the beach with my family. Yet I have
Kim goes on about how he "gave up the joys of close-knit family life for the
company". His wife, Jeong Hee-ja, never liked it, "but she is more accepting
now, maybe because she figures that she does not have a choice. My wife is now
chairman of the Seoul Hilton Hotel." And it's worthy to note that at the time
of writing, the Seoul Hilton was owned by Daewoo.
In the chapter titled "Does Hard Work Harm Your Family Life?" Kim thinks he's
qualified to pontificate about family values. "Divorce is common in the United
States, but I still cannot understand how readily Americans leave their
families. Who's taking care of the children - the future of the country?" Like
the Asian financial meltdown that blindsided Kim, he could never have predicted
South Korea's birth rate would plummet and the divorce rate would hit 47%, one
of the highest in the world.
In the 1990s in the Far East, it was easy for Western entrepreneurs and
journalists to get suckered in the "Asian Tigers" hype and the so-called
"Miracle of the Han", and Kim Woo-choong was the leading huckster. The front
and back covers of the book serve as a cautionary tale of plaudit malfeasance.
Kim is praised on the front cover by Harvey McKay, author of Swim with the
Sharks Without Being Eaten Alive. McKay, author of "inspirational"
business books, wrote, "Kim Woo-choong has an amazing talent to add two plus
two and get four zillion." Louis Kraar, former Fortune magazine Asia editor,
called him the "ultimate international entrepreneur", and wrote the preface to
the book. Henry Kissinger has a blurb, along with Christopher Forbes, of Forbes
Magazine, and Lester Thurow, former dean of Sloan School of Management at
Massachusetts Institute of Technology and a New York Times bestselling author.
The second chapter is subtitled "Why I'm a Born Optimist" and is three pages of
positive thinking drivel. Kim has reasons to be optimistic about his arrest and
indictments. Even if he is convicted and imprisoned, there is a good chance he
will be pardoned next spring on Buddha's birthday, the traditional holiday in
South Korea for releasing white-collar felons from detention centers.
The world would be a better place if Kim Woo-choong never again picked up a
pen. The world needs fewer fraudulent checks, fewer doctored accounting ledgers
and fewer books written by the incompetent and corrupt.
Every Street Is Paved With Gold: The Road to Real Success by Woo-Choong
Kim. Hardcover: William Morrow & Co, 1992. ISBN: 0688113273, 254 pages.
Softcover: HarperCollins Publishers, 1994. ISBN: 0688132294, 254 pages.
James Card is freelance writer living in South Korea. He can be reached
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