Daewoo’s former chief wanted for fraud

South Korean prosecutors said Friday they would seek the arrest of the former head of the bankrupt Daewoo Group, Kim Woo-choong, on charges of falsifying records to conceal debts and diverting billions of dollars abroad. Kim left South Korea in the fall of 1999 after his business empire disintegrated under a huge mound of debt, in an apparent bid to avoid any potential charges against him. Prosecutors are quoted by UPI news agency as saying that Mr. Kim was suspected of embezzling or diverting about $20 billion between 1997 and 1998 in the course of raising huge foreign loans through Daewoo's overseas operations The Daewoo founder was also accused of masterminding the manipulation of accounting books to inflate the combined assets of five Daewoo affiliates by about $40 billion in order to take out a $7.5 billion in bank loans. Prosecutors said they were focusing their probe on tracking down the destination of the slush funds, indicating they believe the money might be used as bribes for politicians. Prosecutors have sought arrest warrants for five former executives of Daewoo subsidiaries on charges of falsifying financial books to exaggerate their companies' net worth to get illegal loans. Daewoo Group collapsed in Aug. 1999 under $80 billion of debt, in the world's biggest bankruptcy. The collapse left local banks with huge debts. Prosecutors are now trying to persuade Kim Woo-choong to return to South Korea for questioning. An official said there is no way of forcibly bringing Kim home to stand trial. Daewoo's union leaders said they will dispatch a team to catch Kim, who was reportedly in Sudan, where Daewoo runs leather, tire and textile factories.

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