Prosecutor's Indict Former Daewoo Chairman

South Korea's Supreme Public Prosecutors’ Office has officially indicted former Daewoo Group chairman Kim Woo-choong for fraud, false accounting and embezzlement.

Prosecutors said Daewoo executives falsified records following the Korean fiscal crisis in 1997. Prosecutors estimate the fraud at $40 billion for the fiscal years 1997 and 1998. They say Kim also defrauding banks of $7 billion in loans, hid $20 billion in the group’s foreign bank accounts, and embezzled $2 billion.

Defense lawyers for the former Daewoo chairman have argued that the $40 billion total is an exaggeration. Kim’s lawyers cite that the actual amount was no more than $21 billion, and the Daewoo had no choice but to falsify its accounts because soaring interest rates in the Asian financial crisis resulted in a loss of $14 billion.

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