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Daewoo founder sentenced to 10 years in prison

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.
/ Source: The Associated Press

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, 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.

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

The 69-year-old businessman appeared in court Tuesday looking fatigued, sitting in a wheelchair wearing a hospital gown. Kim is undergoing treatment for a heart problem and remains hospitalized. The trial had been briefly suspended last July due to his health.

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, adding the court took into account of Kim's contribution to the development of the South Korean economy and his poor health.

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 US$58 billion International Monetary Fund bailout.

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

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 will appeal the ruling, Yonhap news agency reported, citing an unnamed source close to him. His attorney could not be reached for comment.

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).