SEOUL, May 30: Daewoo Group founder Kim Woo-Choong was sentenced to 10 years in prison on Tuesday for fraud and embezzlement relating to the collapse of the firm under 82 billion dollars of debt in one of the world’s largest corporate failures, court officials said.
The Seoul Central District Court said Kim, aged 69 and in poor health, was also ordered to repay 21.4 trillion won (22.5 billion dollars) in restitution, along with a fine of 10 million won.
Kim was convicted of fraudulent accounting, embezzling company funds and illegal transmission of funds abroad, but the court acquitted him of bribing government officials.
Kim’s legal team said it would appeal to a higher court, while prosecutors who asked for a 15-year jail term said they would also consider appealing.
The former tycoon was arrested and indicted in June last year after returning from overseas where he had lived in exile for six years in a bid to escape from justice following South Korea’s biggest corporate collapse.
“He deserves heavy punishment as his illegal activities ... caused losses to lenders and the collapse of Daewoo Group, prompting the injection of enormous public funds,” the court said in its verdict.
However, the ailing Kim will be allowed to remain in hospital for treatment until July 28, when he will begin his prison term.
His doctors had initially said he was too ill to face trial and two months after his return from foreign exile he underwent coronary bypass surgery and had follow-up procedures in January this year.
Kim’s corporate empire collapsed in 1999 under debts estimated at 80 billion dollars in the aftermath of the Asian financial crisis, forcing the government to spend some 30 trillion won in public funds.
Kim fled abroad and as the corporate meltdown unfolded he was accused of ordering his executives to inflate the group’s assets between 1997 and 1998 to acquire banks loans and of smuggling 3.2 billion dollars overseas.
Experts said prosecutors could have sought a life sentence but were considering Kim’s poor health and his contribution to South Korea’s economic success.
A self-made man, Kim once epitomized South Korea’s rags-to-riches rise from poverty to one of the world’s major industrial economies.
He emerged from childhood poverty to launch his own textile trading firm with a 5,000-dollar bank loan in 1967 and turned it into a top conglomerate in the 1970s and 1980s.—AFP
