LAHORE, May 30: Reacting to the conviction on Tuesday of the Daewoo Group of Companies’ founder-chairman Kim Woo-Choong by a Seoul court, Daewoo Pakistan Motorway Services’ chief executive Mr Y K Lee told Dawn here that it would have no effect on the standing of the company in this country. Mr Woo-Choong has been found guilty of fraud and sentenced to 10 years in prison in his home country.

“Daewoo Corporation had sold out its transport company in Pakistan three years ago and is now only operating 10 service areas on the motorway which are in safe hands”, said Mr Y K Lee. He added that the corporation had not gone bankrupt.

“Mr Kim Woo-Choong is no longer the chairman of the group of companies and therefore his conviction will not affect the conglomerate’s business,” he explained. “Every company of the group now has its own president”, he said.

The transport section was one of the two companies of the corporation in Pakistan. It was sold out to the SAMMI group of South Korea. The corporation’s construction wing had left the country after building the motorway in 1998, elaborated Mr Lee.

Daewoo runs 10 service areas on the Lahore-Islamabad motorway which include restaurants, resting places and filling stations.

“We had invested $25 million into these service areas and are operating them without any impact of the problems faced by the group in Korea. We will continue to run our business and there is no question of any closure of any of our businesses in Pakistan,” he reassured.

Mr Lee said the investment on the service areas was little as compared to the corporation’s operations the world over, and that in Pakistan there were no bank loans involved, the factor that landed the owner Mr Woo-Choong into trouble in the first place. “We are using our own money here,” said Mr Lee.

He explained that Daewoo was allowed to run the service areas for 15 years in 1997 under an agreement with the then Government of Pakistan. The period was extendible under another agreement for another 15 years, “and we plan to avail that opportunity.”

Mr Lee, however, admitted that the company was facing problems with regard to its profits falling as a result of the low volume of traffic on the motorway. Saturdays, he said, drew the maximum number of passengers to the Daewoo services along the motorway, but the number was only around 4,000.

“Income thus generated is too low to meet expenses or at times pay salaries to nearly 300 of our employees,” he said.

The chief executive of the SAMMI Daewoo Express, the new name of the corporation’s previous establishment, Mr J B Lee, was not available for comment. But the company’s person in charge of planning and marketing Mr Imran Khan said on his CE’s behalf that their company had nothing to do with Mr Woo-Choong’s Daewoo, and that it was performing well.

It is learnt that SAMMI Daewoo which runs intra-city and inter-city buses in and to and from Lahore belongs to another group of Korean companies. “It bought the transport section of the blemished Korean conglomerate three years ago and was using the name of Daewoo only under an agreement. After two years the word Daewoo would be dropped”, revealed Mr Khan.

He said the SAMMI group was running the transport service with its own investment, involving no bank loans. The company was running 154 buses on different intra-city routes and 70 in Lahore, having a total of 3,500 employees.

Mr Khan said the company intended to expand its operations and also to venture into the construction business, especially in Karachi. Its major bus service is in Punjab and the NWFP, but it plans to also introduce similar services in Sindh by October next.