The Korea Herald


STX Shipbuilding ordered to compensate shareholders for accounting fraud

By KH디지털2

Published : Jan. 25, 2017 - 15:32

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A lower court has ordered cash-strapped STX Offshore & Shipbuilding Co. to compensate its minority shareholders for losses they suffered due to its accounting fraud, court records showed Wednesday.

The Seoul Central District Court ruled in favor of 290 plaintiffs who sued the shipbuilder, former STX Group Chairman Kang Duk-soo and the accounting firm Samjong KPMG, and ordered the defendants to pay a total of some 4.9 billion won ($4.2 million) in damages. 

(Yonhap) (Yonhap)

The court said Kang, who led the group from 2003 to 2014, created and announced forged business reports and financial statements.

"The plaintiffs bought STX Shipbuilding's shares, trusting the audit report and suffered losses due to the fall in stock price," it said.

The 4.9 billion won is about 60 percent of the 7.78 billion won originally sought by the plaintiffs. The court said the losses were caused, not just by the accounting fraud, but also by other criminal activities committed by company executives as well as a nationwide slump in the shipyard industry.
Kang, indicted for his role in the alleged business malpractice, is awaiting the Supreme Court's decision.

In 2015, an appeals court convicted Kang of embezzlement and negligence of duty and handed down a three-year term, suspended for four years. Still, the court has acquitted him of cooking the books, citing a lack of evidence. (Yonhap)