Jo Poong-eon Received W52.6 Bil. From Daewoo

Under the leadership of Kim Dae-jung, the Daewoo Group teetered on the verge of collapse. According to prosecutors, Daewoo attempted to lobby Korean-American Jo Poong-eon, who was on the best terms with the former president, to save the group.

The Central Investigation Division (led by Park Yong-seok) at the Prosecutor General’s Office additionally indicted Jo, Wednesday, for receiving 44.3 million dollars (52.6 billion won based on the then won-dollar exchange rate) from Daewoo’s former Chairman Kim Woo-joong in exchange for influence peddling.

According to prosecutors, Jo spent 24.3 million dollars, out of 44.3 million dollars, buying 71.5 percent of Daewoo Information Systems’ shares (2.58 million shares). He then attempted, in vain, to buy Daewoo Communications’ TDX business with the remaining 20 million dollars. Later, he bought the Samil Building with 9.4 billion won, out of the money returned from Daewoo Communications.

Kim Woo-joong said, “Jo said he would give 30 percent of the 2.58 million shares of Daewoo Information Systems to Kim Hong-geol, third son of former President Kim Dae-jung. Therefore, I thought 30 percent of the shares belonged to Kim Hong-geol.”

Prosecutors announced, “We’re still trying to find whether the shares effectively belong to Kim Hong-geol.”

Prosecutors also uncovered that Kim Woo-joong falsely transferred 7.76 million shares (amounting to 114.9 billion won) of former Daewoo Development to Best Lead Limited, a paper company, in order to avoid the government’s redemption, and redeemed the shares.

While investigating Jo’s issuance of international convertible bonds at a giveaway price, prosecutors found that Jo colluded with RedCap Tour’s major shareholder Koo Bon-ho, a second cousin of LG Group Chairman Koo Bon-moo, to manipulate stock prices and prosecuted Jo for violation of the Securities Exchange Act.

verso@donga.com