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Kim Woo-choong, former head of Daewoo Group, reacts May 30 to his sentence of 10 years in prison. (Yonhap News)
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Court’s sentence serves as warning to other conglomerate heads
A Seoul court handed Kim Woo-choong, the founder of now-defunct Daewoo Group, a 10-year prison sentence, after determining that he was largely behind the fraud and embezzlement which pushed the nation’s second largest conglomerate into bankruptcy. Though the Seoul Central District Court admitted Kim’s contribution to "global business," it also made clear that he should be responsible for causing tremendous damage to the South Korean economy. "The bankruptcy of the Daewoo Group resulted in huge damage to financial institutions and individual investors," the court said in its ruling."[Mr. Kim] is also responsible for forcing many workers at Daewoo and its affiliates to lose their jobs, costing an astronomical loss of public money, and the nation’s credibility, as well," the court added. Along with jail time, the court ordered Kim to pay 21.4 trillion won (22 billion USD, but the chance is slim for the government to retrieve the money, since Mr. Kim first has to cover outstanding debts incurred during his time at the helm of Daewoo Group. So far, the prosecution has found a myriad of personal assets, including artwork worth 4.6 million won, an 800,000 USD mansion in Boston, 590,000 pyeong (2 million square meters) of farmland in France and 4 million USD in his bank accounts. But all of the money would have to go to the Korea Deposit Insurance Corporation, which has the right to retrieve loans made by local financial institutes that sustained a combined 3.83 trillion won in losses due to the collapse of Daewoo Group. Of the amount of losses, the former chairman is personally responsible for 155.4 billion won, more than his currently stated assets will cover. The prosecution, however, decided it would not try to search out any more assets, as they believe their search has been exhaustive. The prosecution’s stiff penalty seems meted out in order send a strong message that such white-collar crimes will be sternly dealt with. The sentence is also in line with sentences given to other conglomerate heads accused of wrongdoing, including the one-time chairs of the Daesang Group and Sungwon Corporation, both of whom received three years in prison and 200 hours of community service.
