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Doosan Starts Round Two of “War of the Brothers”

Posted August. 09, 2005 03:07,   


Doosan Group, currently swept up in the middle of a family feud, admitted to window-dressing Doosan Industrial Development.

This announcement took place at a sensitive time when prosecutors were investigating Doosan based on the contribution of former chairman Park Yong-oh, the older brother of current Doosan chairman Park Yong-sung.

The Doosan Group explained that this revelation was made in time for the window-dressing reporting period, which is due by the end of next year. However, there is the analysis that this is a move made by Park Yong-sung to pressure Park Yong-oh.

This is because Park Yong-oh was the chairman of the corporation during the period when the window-dressing took place.

Voluntary Disclosure of Window Dressing-

Doosan Industrial Development revealed on August 8 that it expanded its sales by 279.7 billion won by moving up the sales amount of construction works from 1995-2001.

In addition, the company explained that since the amount of window-dressing is all reflected in the financial statement for the first half of the year (January to June), the sum total of capital has decreased from last year’s 498.2 billion won to 241.3 billion won as of this June.

Controversy over Background of Revelation-

The economic arena’s analysis is that the admittance of the company’s window-dressing is Park Yong-sung’s pressuring move in preparation for the prosecution’s full-scale investigation that is close at hand.

The years 1995-2001 were a period when Park Yong-oh exerted both direct and indirect influence on the management of Doosan Industrial Development as the CEO of the group.

Moreover, Doosan Industrial Development was where the family feud regarding control of the company started off.

According to the Doosan Group, Park Yong-oh attempted to take hold of Doosan Industrial Development since late last year, and his brothers captured his moves, after which his withdrawal was determined at a family meeting that took place early in July.

Park Yong-oh disclosed the information that Park Yong-sung and others acquired slush funds amounting up to 170 billion won, and the prosecution has started an internal investigation on this.

A Doosan official denied the suspicion, saying, “The admission of window-dressing has nothing to do with Park Yong-oh.”

However, Park Yong-oh’s side countered this, saying, “This is an attempt to evade responsibility on window-dressing and dilute the substance of the investigation.”

Appointment of New Executives; Strengthening Park Yong-sung’s Power?-

On this day, the Doosan Group promoted Doosan vice-president Kim Chul-joong (58) to president of Doosan Trading BG Co., and vice-president Kim Jin (52) to president of the Doosan Bears Inc. (and president of the group’s public relations sector).

In addition, Doosan Corporation vice-presidents Lee Tae-hee and Kim Byung-koo were transferred to Doosan Industrial Development’s Management Support Headquarters and the company’s Leisure Sector, respectively. Doosan Industrial Development’s vice-president, Kim Joon-duk, was appointed general vice-president.

Certain sources speculate that Kim Jin, a close associate of Park Yong-sung, took the seats of both the company’s public relations head and the presidency of Doosan’s baseball team in consideration of Park Yong-oh, who is currently president of the Korea Baseball Organization.

Suk-Min Hong Do-Young Kim smhong@donga.com nirvana1@donga.com