Daewoo boss gets 10 years in jail

Kim Woo-choong, the founder of Daewoo Group, which at one time was among South Korea’s largest industrial firms, has been sentenced to 10 years in jail.

Kim, who was on the run for six years, was found guilty of charges including embezzlement and accounting fraud.

The 69-year-old also has been ordered to hand over 21 trillion won (£12bn: $22bn) and was fined 10m won.

The group collapsed in 1999 under debts of more than $80bn and Kim fled the country, only returning in 2005.

The court said that a “severe sentence was unavoidable” after Kim was found guilty of ordering his executives to inflate the group’s assets so that the company could get bank loans.

He also funnelled billions of dollars overseas.

Daewoo started out as a small textile firm, bought by Kim for $5,000 in 1967.

From this simple beginning, Kim turned Daewoo into one of South Korea’s most powerful industrial conglomerates, or “chaebols”, with close ties to other business leaders and top politicians

At its height, Daewoo employed 320,000 people in 110 countries.

But the company encountered problems in the 1990s after borrowing heavily to finance expansion.

The killer blow came with the Asian financial crisis of 1997 and the company started to crumble.

However, Daewoo was not an isolated incident and a number of Korean firms have found themselves in the spotlight over their finances.

Earlier this month, South Korean prosecutors indicted Chung Mong-Koo, the chairman of carmaker Hyundai Motor for his alleged role in a bribery and embezzlement scandal.

Mr Chung, 68, denies the charges that can carry jail sentences of up to life.