Daewoo Case Goes On

The Korea Deposit Insurance Corporation said Friday that investigators have uncovered 10 billion won ($7.7 million) of real estate hidden by former chief executives of the Daewoo Group. The deposit insurer also said mismanagement by Hanvit Bank had resulted in the loss of more than 40 billion won in loans to the Kohap Group.

An amendment to the law earlier in the year opened the way for the insurer to file damage claims against company officials for managerial negligence.

Eight former heads of Daewoo companies were cited for allegedly hiding 21 pieces of real estate in expectation of being targets of liability suits seeking damages over the firms' bankruptcy, the deposit insurer said. The executives allegedly transferred titles to the properties to family members or bank officials they were acquainted with immediately before the companies were put into debt restructuring programs in August 1999. Some of the properties were then liquidated, the deposit insurer said.

Officials from the deposit insurer withheld findings regarding the former chairman of the now-defunct Daewoo Group, Kim Woo-choong, saying investigations are ongoing. Mr. Kim is believed to be in hiding overseas.

The deposit insurer cited Hanvit Bank for lax management of the collateral it accepted from Kohap Engineering and Construction Co. Hanvit had secured 40 billion won in real estate as security for the loans, but this would later be negated by the court because a filing was not made. The money was not recoverable from Kohap. The insurer said it would bring actions against Hanvit officials for the ensuing losses.

by Suh Kyoung-ho