SK Global Cooking Books up to 1 Trillion Won For 3 Years

The Seoul District Prosecutor`s Office announced today that it found an internal report containing information on the scope and methods of SK Global`s illegal accounting practices in the office of SK Corp. Chairman Chey Tae-won and that it is investigating SK Global`s window-dressing of accounting books.

According to the internal report, SK Global blew up its sales by issuing fake sales slips and inflated net assets of overseas corporations while omitting losses out of the accounting books from 2000 to 2002. The report also contains information on the amount of money the company falsified.

In particular, the report was known to have analyses about the situation, saying, “This could be a problem”.

Accordingly to the report, SK Global fabricated up to about one trillion won for three years. However, it did not have any information on the fraudulent accounting practices of other SK subsidiaries. Other subsidiaries were not involved in raising illegal slush funds, according to the report.

The prosecution investigated former restructuring manager of SK Group Yu Seong-ryeol and financial officers of SK Global about the scope and methods of the illicit accounting practices of the company and is considering summoning officials of the accounting firm that audited the company at that time.

Prosecutors will decide the level of charges after they summon SK Global vice chairman Kim Syng-jeung again and question him about his involvement.

SK Group chairman Son Kil-seung, who is also Chairman of the Federation of Korean Industries, will also be summoned early next week and interrogated on his involvement and details of SK Global`s window-dressing and a dubious contract with JP Morgan. Officials from the Prosecutor`s Office said, “The Prosecution has not found slush funds in the course of investigation and is not planning to probe that matter.”

Sang-Rok Lee myzodan@donga.com