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    Korea
     Jun 1, 2006
Daewoo founder sentenced to 10 years in prison

SEOUL - Daewoo Group founder Kim Woo-choong was sentenced to 10 years in jail on Tuesday by a local court that convicted him for massive fraud, foreign currency law violations and other crimes, court officials said.

The Seoul Central District Court also ordered Kim to forfeit 21.4 trillion won (US$22.62 billion) and pay a 10 million won fine during the first sentencing trial on the case. The former Daewoo chairman, however, was acquitted of bribery charges, the officials said.

"The heavy jail sentence was inevitable because he ignored corporate ethics and committed irregularities only to lead Daewoo Group to bankruptcy," Judge Whang Hyun-zoo said. "This



incurred losses to lenders and in taxpayers' money as it forced the government to spend huge public funds to cope with the Daewoo crisis."

Kim's forfeit is the highest financial penalty ever awarded in South Korea's judicial history.

Daewoo Group, once the second-largest conglomerate in South Korea, collapsed in 1999 under debts of about $80 billion in the wake of the 1997-98 foreign exchange crisis.

Kim, 69, had been in prison since June last year after returning home from nearly six years on the run overseas. He was charged with masterminding accounting fraud worth 20 trillion won, illegally borrowing 9.8 trillion won and smuggling $3.2 billion out of the country through the conglomerate 's overseas financial organization, the BFC (British Finance Center).

His court procedures were delayed, however, as he underwent heart surgery at a South Korean hospital. He was released in August as the court accepted his request that his detention be suspended for health reasons.

The court did not cancel its decision to suspend his imprisonment for one year considering his old age and heart and intestine illnesses. This effectively keeps Kim out of prison until July 28.

The prosecution earlier sought a 15-year prison sentence and forfeiture of 23.3 trillion won for Kim, saying the case was caused by "a vicious cycle of debt-financed management, unruly expansion and irresponsible management."

The court said it handed down a lighter sentence than that sought by the prosecution in light of Kim's leading role in assisting the rapid growth of the modern South Korean economy and his business group.

"His contribution to the national economy with extraordinary diligence and passion deserves a corresponding evaluation," Judge Whang said.

Showing embarrassment at the "heavier-than-expected jail sentence," Kim's defense said they will appeal the court decision.
"It is regrettable that the court did not put into consideration Kim's contribution (to the nation) for his business activities at the turn of the era of growth," one of Kim's lawyers said. They claimed it was unjust to hold an entrepreneur entirely responsible for the so-called "Daewoo crisis" caused by temporary liquidity shortages amid a nationwide foreign exchange crisis.

Most of the eight other former Daewoo executives who stood trial before Kim were convicted for their involvement in the founder's financial irregularities.

(Asia Pulse/Yonhap)

 

 
 



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