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Daewoo Founder Sentenced to 10 Years in Prison

Associated Press
Published | Updated

SEOUL, South Korea – A Seoul court on Tuesday sentenced the founder and former chairman of collapsed conglomerate Daewoo to 10 years in prison for a range of charges including embezzlement and accounting fraud.

The Seoul Central District Court said it also ordered Kim Woo-choong, 69, to forfeit more than 21 trillion won ($22 billion) and pay a fine of 10 million won ($10,600).

Kim was indicted in June last year on charges of multi-trillion won accounting fraud, illegal financing and diverting funds out of the country. He was also accused of embezzlement and breach of trust.

A severe sentence was "unavoidable" since Kim was engaged in activities that contributed to Daewoo Group's bankruptcy and hurt South Korea's image abroad, the court said in the ruling.

"It is doubtful whether (Kim) is truly repentant as he tries to dodge the responsibility and justify his actions," the ruling said.

It wasn't immediately known whether Kim would appeal the ruling.

He was found guilty of the charges, including over 20 trillion won in accounting fraud, 9.8 trillion won worth of illegal financing, and diverting 19 trillion won out of the country, Judge Nho Yu-kyong said. He was also found to have embezzled $100 million, she said.

Kim started as a textile salesman in 1967, building an empire that came to stand among the largest conglomerates, or "chaebol," in South Korea.

Daewoo collapsed under massive debts in the wake of the 1997-98 Asian financial crisis, when the South Korean government was forced to accept a $58 billion International Monetary Fund bailout.

Parts of Daewoo were broken up and sold, with Detroit-based General Motors Corp. (GM)acquiring a major stake in Daewoo Motor to create GM Daewoo in 2002.

Kim fled the country in 1999, living mostly in France, until returning to South Korea last June to face charges.

The court ruling was less severe than what prosecutors had sought. Earlier this month, prosecutors requested the court order Kim to serve 15 years in prison and forfeit 23.4 trillion won ($24.8 billion).