The prosecution looking into
Daewoo Shipbuilding and Marine Engineering has found new allegations of embezzlement amounting to 2 billion won ($1.7 million), on top of the suspected 5 trillion won accounting fraud, sources said Thursday.
The investigators suspected that DSME’s former CEO Nam Sang-tae created about $500,000 worth of slush funds in 2008 through a DSME affiliate to purchase stocks in a paper company set up by his college friend surnamed Jeong.
In exchange for business favors, Nam allegedly received tens of billions of won in dividends from the paper company in what appears to be a kickback scheme. The prosecution has secured details of the slush fund account, local reports said.
Nam was arrested Wednesday on charges of giving business favors to Jeong’s company through the DSME affiliate fund while he was serving as the CEO from 2006 to 2012.
The prosecution summoned several other company officials to look into Nam’s other allegations that he allegedly gave business favors to a public relations agency.
The firm received 2 billion won from DSME from 2009 to 2011 for conducting PR activities on its behalf, an amount unusually high, according to the investigators.
The prosecution also suspects Nam may have received kickbacks from the PR agency.
In a separate probe into a former DSME employee accused of embezzling 18 billion won of the company’s fund, prosecutors arrested his girlfriend surnamed Kim on charges of harboring a criminal.
Investigators suspect Kim played a major role in concealing evidence of illegal activities of her boyfriend surnamed Lim. The 46-year-old man is accused of embezzling from 2008 to last year by fabricating accounting books.
The couple was caught on June 8 by the police after running away amid the ongoing investigation.
“There is a need to deeply look into the case as circumstances have revealed that Kim had actively played a role,” said the prosecution.
The couple allegedly used the company’s fund to purchase buildings and apartments in Busan, and luxury goods. The fund was also sent to a clothing business in Geojaedo Island, run by Kim, the investigators said.
Kim reportedly denied her charges, claiming that she did not recognize that Lim had embezzled the money.
By Lee Hyun-jeong (
rene@heraldcorp.com)