More than a decade after the collapse of Daewoo Group in 1999, the group founder and former chairman Kim Woo-choong has stepped out of the shadows to promote a book telling the “real story” about what caused the group to fall.
The author is Shin Jang-sup, a professor at the National University of Singapore, who wrote the book as Kim told it.
The demise of Daewoo is recorded as the largest bankruptcy ever in Korea. As of the late 1990s, the group was the nation’s second-largest industrial conglomerate, with 76.7 trillion won ($75.6 billion) in assets.
In the book, titled “Dialogue with Kim Woo-choong ― The World is Still Wide with Many Things to Do,” the 78-year-old business mogul said the government’s decision to break up the debt-ridden Daewoo in 1999 was wrong and has proven to be a loss for the Korean economy.
“The main cause behind the collapse of Daewoo was the government’s excessive pressure on conglomerates to cut their debt, and this pressure originated from the International Monetary Fund,’’ Kim is quoted as saying in the book.
|Kim Woo-choong. (The Korea Herald)|
The Kim Dae-jung government forced local conglomerates, known locally as chaebol, to slash their debt to below 200 percent. This was part of the homework Seoul had promised the IMF it would do in return for receiving a record-sized bailout in 1998.
“Unlike government officials, Kim wanted to tackle the debt crisis by raising funds from more exports, rather than from debt cuts,” said Shin at a press conference on Tuesday to announce the publication of his book. “His stance was obviously in conflict with the government’s economic policymaking team.”
Despite its self-rescue efforts, Daewoo Group began to go down the drain in 1999 when its negotiations with General Motors to sell its faltering automotive unit fell through. Three years later, GM bought Daewoo Motor for a bargain.
The havoc that was wreaked on the nation by Daewoo’s fall did not warrant the heavy punitive action brought against Kim, the professor claimed, stressing that there had been no evidence that he had misappropriated Daewoo’s corporate funds.
“Furthermore, Kim, as the founder of Korea’s second-largest company, has a made critical contributions to the nation and its economy. It is therefore a pity and quite regrettable to see him being treated as a criminal,” Shin said.
Kim was imprisoned after being sentenced to 8 1/2 years in jail in 2006 for embezzlement and accounting fraud.
On top of the prison sentence, he was ordered to pay 17.9 trillion won ($17.6 billion) for restitution, and another 10 million won in fines.
In 2008, Kim was pardoned and since then has been living overseas. He has yet to pay up.
With the publication of the book, rumors are flying as to whether Kim will make a comeback in the local business scene.
Shin said the possibilities are very slim, considering Kim’s age.
“Instead of making direct contributions, Kim has said he wants to dedicate the remainder of his life to cultivating global talent,’’ Shin said.
As a case in point, the Daewoo founder set up an institute for talent cultivation in Vietnam under the name Global Young Business Managers in 2012.
“Kim has a constant interest in helping young people realize their dreams. He will spend more of his time nurturing the next generation of Daewoo people, people who are willing to explore overseas business opportunities,’’ he said.
By Seo Jee-yeon (email@example.com