BUSINESS

Biz circle mourns Daewoo founder's death

By Kim Da-sol

Once admired tycoon Kim Woo-choong disgraced in later years after fraud verdict

  • Published : Dec 10, 2019 - 16:26
  • Updated : Dec 11, 2019 - 15:43

Kim Woo-choong, founder of Daewoo Group -- once among Korea’s four major conglomerates -- died from a chronic disease Monday evening at the age of 82. 

The self-made man had contributed to the country’s industrial growth in the 1970s and 1980s. 

The former chairman of Daewoo Group died at 11:50 p.m. at a hospital in Suwon, Gyeonggi Province, where he had been receiving medical treatment since December last year due to his worsening health condition, Kim’s family said. 

According to the Daewoosky Institute, a group that represents former employees of Daewoo Group, Kim’s funeral is to be held at 8 a.m. Thursday at Ajou University Hospital in Suwon. Ajou University was acquired by Kim’s educational foundation Daewoo Academy in 1977. 

Kim last appeared in public at a ceremony celebrating the 51st anniversary of Daewoo Group’s foundation in March last year. 

Daewoo Group Founder Kim Woo-choong (Daewoosky Institute)

He was born in Daegu in 1936 and established Daewoo Industrial at the age of 30 with 5 million won ($4,200) in capital and five employees. 

At the age of 45 he became chairman of Daewoo Group and aggressively expanded its business portfolio. 

The group was the second-largest conglomerate in the 1990s in terms of assets, following Hyundai Group, and comprised 41 subsidiaries in sectors including trading, electronics, financial services and construction. 

Its exports in 1998 -- before the company disbanded in 1999 -- amounted to $18.6 billion, accounting for 14 percent of Korea’s total exports. 

Following the Asian financial crisis in 1997, Daewoo Group’s financial status severely deteriorated. Despite measures to reduce the group’s size to 10 affiliates in four business sectors, the group went bankrupt, and all its subsidiaries were disbanded in 1999.

After the parent company Daewoo Corp. was separated into Daewoo Construction and Daewoo International, its core business Daewoo Motor was acquired by US automaker General Motors in 2002, which has now become GM Korea.

Daewoo International was later acquired by Posco Group, while Daewoo Machinery was incorporated into Doosan Group and renamed Doosan Infracore in 2005. 

Earlier this year, Hyundai Heavy Industries clinched a deal to acquire Daewoo Shipbuilding & Marine Engineering.

Daewoo Group Founder Kim Woo-choong (Daewoosky Institute)

After the group collapsed under $80 billion of debt, the company’s financial problems continued.

In 2006, Kim was sentenced to 10 years in prison after being accused of accounting fraud amounting to 21 trillion won, illegal financing worth 9.9 trillion won and other crimes related to his business. 

The Seoul Central District Court also ordered Kim to forfeit 21.4 trillion won and pay a fine of 10 million won. 

The Supreme Court later confirmed the appellate court’s decision to reduce Kim’s sentence to eight years and six months and to forfeit 17.9 trillion won. 

Kim was given a special pardon in January 2008 during the Roh Moo-hyun administration.

According to the legal circle, though there is no direct way for prosecutors to reclaim the rest of Kim’s forfeiture amount, it would be possible for former Daewoo Group executives to forfeit the rest, as they were found to be accomplices of Kim when he fled overseas in 2005, and were also sentenced to forfeit 23.3 trillion won. 

Meanwhile, the country’s biggest lobby, the Federation of Korean Industries, released a statement Tuesday saying Kim was “a pioneer who led South Korea’s industrialization and globalization.” It added that he was the first to spread the Korean brand to then-new markets such as South America, China, Vietnam and Africa.

“Like his saying, ‘The world is big, and there are many things to do,’ his effort to let the world know South Korea has expanded the country’s economic territory,” the FKI said in a statement. 

Kim had served as FKI chairman in 1998 and asked conglomerates to participate in activities to aid the recovery of the economy, such as a nationwide “gold-collecting movement.”

By Kim Da-sol (ddd@heraldcorp.com)



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