South Korean prosecutors brought charges of fraud and embezzlement on Friday against former Daewoo group chairman Kim Woo-choong, once revered as an industrialist who helped build the country's economy. Kim fled South Korea in 1999 when Daewoo collapsed in one of the world's biggest bankruptcies, with more than $70 billion in debts, but he returned on June 14, saying he was seeking to make peace with his past.
Kim, 69, was charged with illegally procuring loans of about 10 trillion won ($9.67 billion), misallocating $20 billion in Daewoo funds through overseas accounts and helping doctor Daewoo's books to falsify assets of about 41 trillion won, prosecutors said.
If convicted of the charges, Kim could face from five years to life in prison, but in South Korea, sentences are ultimately at the discretion of the judge hearing the case. Judges in the past have been lenient towards high-ranking corporate criminals.
Kim was a fabric salesman who invested about $5,000 in a textiles company in 1967. He used his business acumen and close ties to South Korea's leaders to build that into a conglomerate that once employed 320,000 people in 110 countries.
He borrowed frantically to keep up the expansion of Daewoo, which was called a "bicycle conglomerate" in South Korea because it had to keep its wheels moving or keel over.
Continuous spending, borrowing and expansion meant thin margins even at the best of times. When the Asian financial crisis hit South Korea in 1997, the wheels at Daewoo locked.
In August 1999, the South Korean government took control of Daewoo's debts, leaving the South Korean taxpayer holding the bag for billions of dollars in losses.
Daewoo, then a multinational giant in civil engineering, automobiles and shipbuilding, broke up into a clutch of businesses after its collapse.
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