The former chairman and founder of South Korea's troubled electronics and industrial giant, Daewoo, has been sentenced to a 10-year jail term for accounting fraud and embezzlement.

Kim Woo-choong had earlier been found guilty of a range of frauds, some of which involved the use of fake letters of credit (L/Cs).

Indictment

In its ruling on 30 May 2006, a Seoul court also ordered 70-year-old Kim to pay a fine of 10 million won, but he has not yet been detained since he is ill in hospital with heart problems. He is expected to start serving his sentence at the end of July.

Kim was indicted last year for accounting fraud and other financial crimes in one of South Korea's largest corruption scandals.

Collapse

Kim presided over what was once the country's second-largest conglomerate, the Daewoo Group, which collapsed spectacularly in 1999 under huge debts amassed in the wake of the 1997-98 Asian financial crisis.

In July 2005, prosecutors indicted Kim on charges of ordering Daewoo executives to inflate the assets of at least four Daewoo subsidiaries by 41 trillion won between 1997 and 1998.

Fake L/Cs

Kim was also accused of illegally borrowing around 10 trillion won from local banks using false accounting information and diverting 25 trillion won in slush funds overseas by manipulating import-export documentation.

Prosecutors also said Kim employed fake L/Cs to fraudulently obtain millions of US dollars (DC World News, 25 August 2005).

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