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Ex-CFO of Daewoo Shipbuilding summoned over alleged accounting fraud

All News 16:20 July 14, 2016

SEOUL, July 14 (Yonhap) -- Prosecutors on Thursday said they have indicted a former CFO of Daewoo Shipbuilding & Marine Engineering Co. (DSME) over his alleged involvement in the financially troubled company's accounting fraud.

The Seoul Central District Prosecutors' Office said the former executive, identified only by his surname Kim, has been charged for rigging the company's books between 2013 and 2014.

Kim, who was also a vice chairman of the state-run Korea Development Bank (KDB), held the position of the shipyard's financial chief from 2012 to 2015. KDB is Daewoo Shipbuilding's biggest shareholder.

Prosecutors said they have detected some 5.7 trillion won (US$5 billion) worth of accounting fraud committed between 2012 and 2014 to cover up what turned out to be years of corruption and business losses.

Former CEO of the company Ko Jae-ho has been denying his involvement in the process, but prosecutors said such mass-scale fraud could not have been conducted without the involvement of the executive board.

About a month earlier, the country's state auditor said DSME may have rigged its books to hide up to 1.5 trillion won (US$1.28 billion) in losses between 2013 and 2014.

The outcome of the probe by the Board of Audit and Inspection was based on an analysis of orders for 40 offshore plants won by the South Korean shipbuilder over the cited period.

Prosecutors are currently looking into some 500 orders clenched by Daewoo Shipbuilding since 2006.

The company, along with two other major shipbuilders here, is currently carrying out self-created debt-restructuring plans in the face of weak orders caused by the protracted global economic slump.


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