Four former Daewoo executives
were arrested late last week, bringing the total arrested to seven, writes Associated
Press (AP).
Prosecutors, who are accusing the bankrupt conglomerate of operating a multi-billion
pound slush fund via its London office, arrested three former executives of
Daewoo’s flagship trading arm, Daewoo Corp., alongside the former president
of Daewoo Motor Co., on charges of fraud and violation of foreign exchange laws.
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Prosecutors are also reported to be trying to track down 65-year-old Daewoo
Group founder Kim Woo Choong. Said to be hiding overseas, officials are trying
to persuade him to return and face charges of using the fund for bribery and
other purposes during Daewoo’s expansion in the 1980s and 1990s.
The prosecutors are saying that Daewoo’s London office raised $US20 billion
by taking out illegal foreign exchange loans and pooling funds from its subsidiaries
via false import and export documents. Daewoo is claiming that the money was
invested in its overseas assembly operations alongside other facilities, although
prosecutors have said that at least $US8 billion of the amount was put away
as a slush fund for Woo Choong.
An arrest warrant was also sought for the former president of Daewoo Heavy
Industries Co., but the court rejected this, citing the need for more evidence.
President Kim Dae Jung said that it was essential that big business clean up
its financial transactions to boost investor confidence in South Korea’s economy,
still recovering from the 1997-98 Asian financial crisis.
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By GlobalData
Other former Daewoo executives are currently under investigation, says AP.
