Daewoo founder's 'hidden' assets discovered

By Jung Min-ho

Prosecutors said Monday they have found more assets believed to be owned by Kim Woo-choong, founder of the now-defunct Daewoo Group, under false names.

According to the Seoul Central District Prosecutor’s Office, Kim’s lawyer, whose name was withheld, sold shares in A-One Country Club in Yangsan, South Gyeongsang Province, to Adonis, a resort firm operated by Kim’s family, in 2010 for 800 million won ($760,000).

The prosecution suspects the money can be traced back to Kim.

Prosecutors said they began an investigation after receiving a report that Kim owned the shares in A-One through the lawyer. They believe the lawyer holds the key to Kim’s other hidden assets.

After Daewoo, once Korea’s second-biggest industrial conglomerate, filed for bankruptcy in 1999, Kim was sentenced to eight-and-a-half years in prison for falsifying corporate account books and was ordered to pay 17.9 trillion won ($16.9 billion) in fines and compensation in 2006.

He received a special presidential pardon regarding the prison term the following year. But he has only paid 88.4 billion won of the financial penalty so far. Prosecutors are still looking for the rest of his hidden assets.

According to prosecutors, his lawyer purchased some 2,000 shares (two percent) of A-One in 2003 and then sold them in 2010 to Adonis Resort, which Kim’s wife and relatives are major shareholders of.

After the deal, Adonis Resort became the largest shareholder of the golf course with a 51 percent stake. The wife and relatives reportedly have 82.4 percent of Adonis shares.

“We thought a report we received was plausible. So we started the investigation,” an official from the prosecution said.

In 2008, prosecutors seized 88.1 billion won of his property after finding stocks he owned under a false name.

With the latest probe, Kim could face further charges.

The conglomerate, which began as a textile company in 1967, built up an extensive portfolio spanning autos and ships to home appliances and financial services, with 41 domestic affiliates and 396 overseas operations by 1998.

But the group declared insolvency in the aftermath of the Asian financial crisis.

Kim fled Korea shortly after Daewoo crumbled under the weight of $80 billion debt in one of the world’s largest bankruptcies. He was arrested after he returned to the country in 2005.