Dong Ahs Ex-Chief Loses in Lawsuit
By Park Si-soo
Staff Reporter
Former executives of Dong Ah Construction and its former chairman, Choi Won-seok, lost in a lawsuit the company filed against them for damages it sustained as a result of illegalities they committed to create a slush fund.
The Supreme Court ruled Monday that the accused, including Choi, must pay a total of 600 million won ($513,000) in compensation to the company.
The top court upheld the appellate court's guilty verdict, stating, "Given evidence and testimony, it's obvious that Choi and other former executives inflicted financial damage on Dong Ah."
In particular, Judge Yang Seung-tae, who was in charge of the case, criticized Choi for his breaching of employees' trust.
"Choi, as head of the company, should have thoroughly monitored all affairs in the company and run the company smoothly," Yang said in the ruling.
Dong Ah filed a damages suit against Choi and 17 other former executives for the creating a slush fund of some 12.8 billion won by manipulating accounting records and giving a portion of the funds to influential politicians and bureaucrats in hopes of business favors.
A provincial court found them guilty and ordered them to compensate the company one billion won, but an appellate court reduced the amount to 700 million won.
Dong Ah was one of the key construction firms that aggressively extended business into the Middle East in the 1980s, playing a pivotal role in enriching the Korean economy by successfully completing large-scale and lucrative construction projects there.
Among the feats it achieved in the region include the construction of a $3.8-billion manmade river project in Libya between 1983 and 1991. It was also the first Korean company to enter the Japanese public construction market in 1998.
In line with business diversification, Choi entered the media and education industries by establishing a cable TV station specialized in fashion and a college whose curriculum is focused on media and entertainment.
But a stagnant construction market at home and abroad thwarted his aggressive expansion scheme, forcing the company to go under bankruptcy protection in the late 1990s.
In November 2000, creditors halted Dong Ah's self-rescue plan and the firm, established in 1945, went bankrupt. At present, Dong Ah Construction, headed by Park Young-sik, continues to engage in business. Meanwhile, the dishonored Choi was convicted of multiple charges, including breach of trust and embezzlement, and was sentenced to three years in prison with his basic civil rights suspended for an additional two years. But he was cleared of the charges in a special pardon in August last year.