KDIC Has Only Recovered 0.14 Percent of Daewoo Group’s Insolvent Funds

It was reported that money that the Korea Deposit Insurance Corporation (KDIC), the local largest public fund investment institute, retrieved from the Daewoo Group for the past four years was only about 0.1 percent of the entire amount of funds that caused insolvency.

An amount of money that causes insolvency is a representation of the scale of funds that damage the financial sector caused by a company’s cooking the books or its staff’s illegal activities.

Materials about public funds related to the Daewoo Group that Grand National Party lawmaker Kim Yang-soo, who belongs to the Finance and Economy Committee of the National Assembly, received from the KDIC showed yesterday that as of late June, the amount of funds retrieved from Daewoo Group totaled 5.5 billion won.

This amount is just 0.14 percent of the whole amount of money that caused the insolvency, about 3.85 trillion won as estimated by the KDIC.

In particular, the amount of funds that caused insolvency, related to former Daewoo Group Chairman Kim Woo-jung and his lineal descendants, accounted for 99.5 percent (about 3.83 trillion won) of the total. Nevertheless, it was revealed that the KDIC has not received any of this related fund money back at all.

The special investigation planning team of the KDIC has carried out tasks to retrieve public funds by probing into insolvent companies such as the Daewoo Group starting March 2001. Among them, a total of 23 lawsuits for claiming damages related to the Daewoo Group have been concluded or are underway, and their total lawsuit scale amounts to 222.5 billion won.

Rep. Kim said, “The amount of funds for lawsuits filed by the KDIC against the Daewoo Group merely stands at five percent of the entire amount of money that caused the insolvency.”

Jung-Eun Lee lightee@donga.com