[Editorial] Let Daewoo’s Kim Woo-choong be the last one

Kim Woo-choong, former head of Daewoo Group, reacts May 30 to his sentence of 10 years in prison. (Yonhap News)

Former Daewoo group chairman Kim Woo-choong has been sentenced to 10 years in prison and trillions of won in financial penalties. The court’s sentence was about more than just Kim. It was also a judgment on the deep-rooted evils of the conglomerates, evils that have existed since the years of Korea’s development. The ruling was also a legal declaration stating that the old business methods that depended on wrongful practices cannot stand before today’s system. Finally, it was a warning that there must not be anyone else like Kim Woo-choong in the history of the South Korean economy.

Kim built Korea’s second largest conglomerate, or chaebeol, with his bare hands, and as such he was the object of young people’s dreams. His book of essays, "It’s a Big World and There’s Lots to Do" (the English edition is titled "Every Street is Paved With Gold"), sold over a million copies. In it, Kim criticized Korean society for selfishness and said that fighting fair and square is more important than winning. But he didn’t mean it. There was a dark side to it all, and no one knew about it.

When Kim returned from overseas after years in hiding, it caused some heated debate. Some called for leniency because he had contributed to the development of the Korean economy. He did, of course, contribute to its surface growth and create many jobs. His challenging entrepreneurial spirit, which he called "global management," is worth emulation. However, it is clear that his achievements do not stand up to ethical and legal standards. If the Korean economy is to develop to the next level, the country needs to make a clear break from the wrongful practices of the past, and the Daewoo affair has to be where it all stops. The court noted that Daewoo’s bankruptcy caused massive damage to loan institutions and personal and institutional investors, that his use of public funds to restructure Daewoo’s companies was a financial burden for the whole country, that many employees of Daewoo companies and their contractors lost their jobs and were made to face economic difficulty, and that Daewoo’s collapse hurt international confidence in Korea. The court’s judgment is a statement about how much damage can be done by one businessman’s wrongful management practices.

The Daewoo affair is now history. Subsidiaries that received infusions of public funds to aid in their restructuring have come back to life. Now what needs to be remembered is the lesson that comes from what happened. If there are chaebeol that still have the same delusions Daewoo did, they must change their framework immediately. People need to realize that economic crimes can no longer hide behind the protection offered by the phrase, "saving the economy." Public opinion, for its part, also needs to be cool-headed.

Then there is Kim himself. It is very regrettable that he continues to deny all responsibility for the Daewoo affair and blame outside elements. It is also problematic that numerous Daewoo families are in ruin, and yet Kim’s family still has hundreds of billions of won in assets.