updated 7/1/2005 9:10:35 AM ET 2005-07-01T13:10:35

The former chairman of collapsed South Korean conglomerate Daewoo Group was indicted Friday on $71 billion in fraud charges after living nearly six years abroad on the run.

Kim Woo-choong, who returned to South Korea last month after fleeing the country in 1999, is accused of having falsified Daewoo's accounts to draw billions of dollars in illegal bank loans before diverting them overseas.

He has come to epitomize the excesses of the country's "chaebol" — the privately controlled conglomerates whose unbridled expansion on borrowed money helped undermine the economy in the 1990s.

Kim was indicted on charges of $40 billion in accounting fraud, obtaining $9 billion in illegal financing and diverting $22 billion, the Supreme Public Prosecutors's Office said in astatement.

Police and prosecutors believe Kim, 69, had been traveling in Europe since leaving South Korea, and that he acquired French citizenship during his sojourn. He left the country in October 1999 before charges were prepared, first heading for a Daewoo auto component factory in Yantai, China.

Kim could potentially face a maximum sentence of life in prison, though given his age, former stature in South Korea and public expression of remorse upon arrival it's doubtful he would serve much time if convicted.

The rise and fall of Kim, who started as a textile salesman in 1967, personified South Korea's economic growth of the 1970s. The country's former military governments provided cheap loans and tax benefits to nurture Daewoo and a handful of other family-run businesses into conglomerates that mass-produced for export markets.

At its peak, Kim's empire had interests in automaking, shipbuilding, textiles, electronics and other goods.

The collapse of Daewoo and other conglomerates during the Asian crisis forced South Korea to accept an $58 billion International Monetary Fund bailout.

Parts of Daewoo were sold off after the collapse. Detroit-based General Motors Corp. acquired a majority stake in the now-defunct Daewoo Motor, creating GM Daewoo in 2002.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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