The Daewoo dissolution and corruption scandal was a 1999-2006 scandal in

South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korean Peninsula and sharing a land border with North Korea. Its western border is formed by the Yellow Sea, while its ea ...

involving the bankruptcy of

Daewoo Daewoo ( ; Hangul: , Hanja: , ; literally "great universe" and a portmanteau of "dae" meaning great, and the given name of founder and chairman Kim Woo-choong) also known as the Daewoo Group, was a major South Korean chaebol (type of conglomera ...

, then-country's second largest company, and a subsequent corruption investigation, involving arrests, escapes and eventual conviction of dozens of company's top executives. The resulting scandal has been described as one of the biggest scandals in South Korea.

Background

was a major South Korean conglomerate. Prior to the

Asian financial crisis The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1 ...

, Daewoo was the second largest conglomerate in Korea. By 1999, Daewoo went bankrupt, with debts of about US$50-80 billion.

Corruption scandal

Soon after the demise, South Korean prosecutors filed charges against over 40 top executives, in what BBC described as the Daewoo corruption scandal. This was related to the discovery that company's auditors concealed the amount of debt, and that bribes of about 470 billion won were involved (close to US$400 million). Loss from bribery and corruption has been estimated to over US$1 billion. Daewoo Chairman Kim Woo-choong fled to Vietnam, and former Daewoo factory workers put up "Wanted" posters with his picture. Kim returned to Korea in June 2005 and was promptly arrested. He was charged with masterminding accounting fraud of 41 trillion won (US$43.4 billion), illegally borrowing 9.8 trillion won (US$10.3 billion), and smuggling US$3.2 billion out of the country. On 30 May 2006, Kim was sentenced to 10 years in prison after being convicted of fraud and embezzlement. On the last day of the trial, Kim tearfully addressed the court, "I cannot dodge my responsibility of wrongly buttoning up the final button of fate." On 30 December 2007, Kim was granted amnesty by President

Roh Moo-hyun Roh Moo-hyun (; ; 1 September 1946 – 23 May 2009) was a South Korean politician and lawyer who served as the ninth president of South Korea between 2003 and 2008. Roh's pre-presidential political career was focused on human rights advocacy for ...

References

{{Corporate scandals Daewoo Scandals in South Korea Corruption in South Korea 1999 in South Korea 1999 scandals

Background

Corruption scandal

See also

References