[Focus] Prospect for investigation of Daewoo

The prosecution¡¯s investigation into the alleged fabrication of financial records at Daewoo Group subsidiaries seems to be aiming at closing the legal action against the former and present executives of the once largest conglomerate of the nation.

The prosecutors confirmed charges filed by the Financial Supervisory Service one by one and determined whether their behavior constituted crimes or not, and the boundary of those would should be prosecuted.

Therefore, there is no special content disclosed anew in the prosecution probe.

The focus of concern is not the fabrication of the window-dressing settlement itself, but the investigation into the alleged creation of slush funds and smuggling out of dollars by former chairman Kim Woo-Choong.

Whether Kim will return home or will be prosecuted also is drawing a keen attention from the public as well as the business world.

If an investigation into the allegations is conducted, it might escalate to a full-fledged probe into the alleged collusion between politicians and businessmen from simple irregularities involving a businessman.

The prosecutors also have pressed hard the working-level officials in charge of fund management at Daewoo subsidiaries about whether Kim created a slush fund estimated at more than 10 trillion won and have tracked related bank accounts, according to sources.

In the process, the prosecutors confirmed that a considerable sum of the money amounting to several trillion won recorded in the accounting book as being invested in overseas projects in 1997 and 1998 was not put into them actually, the sources added.

However, the prosecutors seemed to fail to obtain a satisfactory result in their investigation because former chairman Kim, who has the key to the question of Daewoo funds, still is staying abroad, and it is difficult to track overseas accounts actually. The investigation into these allegations is expected to resume after the arrest of other related former executives of Daewoo firms Friday.

The prosecutors are expected to focus on whether the slush fund was formed here and if so how it was used. They also will probe whether Daewoo officials embezzled the money.

In particular, the prosecutors will carry out a full-fledged probe of the so-called ¡°real powers¡± of the group before 1997.

¡°Core aides of Kim and the real powers were all figures who were active before 1997,¡± an investigator said. ¡°We will check them fully, too.¡±

If so, the investigation will make a new turn from the level of wrapping up to hunting new games. Yet the probe is expected to be conducted on a limited basis. Together with difficulties the investigators are expected to face, there might occur a diplomatic row with related countries in case of tracking overseas accounts, and Kim¡¯s side is expected to resist. It will be a big burden on the part of the prosecution that the case might develop into a lobbying scandal involving politicians and government officials.

The prosecution included the certified public accountant who helped the Daewoo executives to falsify the financial records as subjects for prosecution. It is rare that a CPA is to be prosecuted with regard to the loans offered on the basis of the fabricated window-dressing settlement, although the Supreme Court had convicted owners of insolvent firms.

By Lee Soo-Hyung

Legal action against Kim Woo-Choong

How will former Daewoo Group chairman Kim Woo-Choong be dealt with by law?

Taking legal action against the former executives of the Daewoo affiliates, the prosecution made it clear that Kim is the key figure in the illegal practice of falsifying the financial records. It did not delete the phrase in the arrest warrant, ¡°in collaboration with Kim Woo-Choong.¡±

Former ranking officials who were questioned also claimed that former chairman Kim ordered directly the basic fabrication of the window-dressing settlements, and had scolded those in charge of finance of the subsidiaries that were reluctant to honor his order.

Therefore, Kim has no way to avoid responsibility for the illegal practice as the top commander of the case, if his custody is secured. The prosecutors said that they were contacting Kim through his family and lawyers, and advising him to return home voluntarily. But they seem almost not to expect his return.

By Lee Soo-Hyung

Whereabouts of Chairman Kim

Where is Kim Woo-Choong, former chairman of Daewoo Group, and what is he doing?

As a follow-up to the prosecution¡¯s arrest of former top managers and an accountant of Daewoo Group, the focus of interest has been placed on the recent condition of Chairman Kim and the possibility of expanding the investigation. Considering the management characteristic of Daewoo Group, the prosecution cannot find where the responsibility lies without Kim.

There are many rumors on the whereabouts of former Chairman Kim.

¡°I received a report from a local office that Chairman Kim was staying in Sudan last October,¡± Lee Tae-Yong, president of Daewoo International, recently said.

However, another Daewoo executive said: ¡°Only family members and a few very close to Chairman Kim are able to make contact with him. As far as I know, he was staying in Europe, not in Sudan.¡±

After attending the groundbreaking ceremony for the construction of an automobile part factory in Yentai, China, in October 1999, Chairman Kim has disappeared and continued his fugitive status.

By Ha Im-Sook