'It's time to reassess Daewoo Group'

Shin Jang-sup, professor at the National University of Singapore, speaks about his new book, a dialogue with former Daewoo chief Kim Woo-choong, at the Korea Press Center in downtown Seoul, Tuesday. / Yonhap

By Kim Ji-soo

Professor Shin Jang-sup, author of a new book that details 150 hours of dialogue with Kim Woo-choong, founder of the now-defunct Daewoo Group, said Kim was an entrepreneur whose “global management” style was still relevant for the Korean economy today.

In a press conference at the Korea Press Center in downtown Seoul, Shin, a faculty member at the National University of Singapore, said it was time to reassess the Daewoo Group in light of Korea’s economic development history and international economic trends.

“Entrepreneurs like Kim Woo-joong and the late Chung Ju-yung of Hyundai should be held up [as role models], just as Steve Jobs is,” said Shin.

The Daewoo Group was one of the top five Korean conglomerates before the 1997-98 Asian financial crisis. In November 1997, Korea sought official assistance from the International Monetary Fund (IMF) to avoid having to default on its external debts amid the currency and banking turmoil.

Daewoo was dissolved in 1999 under the government-led restructuring program. In August 2001, Asia’s fourth-biggest economy repaid in full the IMF rescue funds, worth $19.5 billion, after a drastic restructuring in the financial sector.

In 2006, Kim was sentenced to eight years and six months in prison for financial crimes; he was also slapped with 10 million won in fines and about 17.9 trillion won in forfeitures. Combined with the fines imposed on other Daewoo executives, the conglomerate’s outstanding fines total about 23 trillion won.

Shin said the government’s move last year to revise relevant laws to enable it to collect outstanding fines was like “killing for the third time” the tycoon. The first two “killings” were the group’s dissolution and Kim’s sentence.

Kim, whose mantra, “Every Street is Paved With Gold,” was also the title of the tycoon’s 1989 book, has been in Vietnam since the late President Roh Moo-hyun granted him a special pardon in January 2008.

Shin’s book, “Dialogue with Kim Woo-choong ― The World Is Still Wide and There Are Many Things to Do,” contains Kim’s first comments in 15 years on what happened to Daewoo.

The author and Kim met in 2010, and they agreed in 2012 to publish their dialogue in a book. The author sees Daewoo’s fall as Kim losing his fight against policymakers of the time, who were pressed to restructure under the IMF-led program.

When Kim, then head of the Federation of Korean Industries, clashed with policymakers in 1998, the book says, the government passed two major regulatory measures aimed at controlling corporate liquidity. The Daewoo Group was hit hardest.

In the book, Kim also says a deal between Daewoo and GM was still in the works, even though the government said it had broken down in July 1998.

“The clash in philosophy led to clashes in emotions, which led to Daewoo’s fall,” said Shin.

The author publicly asked Lee Hun-jae, then chairman of the Financial Services Commission (FSC), and Kang Bong-kyun, then chief economic adviser to the President, if their decisions were best for Korea.

In a separate interview with the Yonhap news agency later in the day, Kang said the restructuring had enabled Korea to get out of the financial crisis and also to withstand the 2008 global economic crisis.

Kim now lives in Hanoi, where he has operated a training program called the Global Young Business Manager since 2012. He travels to Korea once a month.

Shin said he hoped Kim could return as an “elder” and train young Koreans to pioneer markets around the world.