[EDITORIAL] Track Down Daewoo Boss's 'Stash'

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[EDITORIAL] Track Down Daewoo Boss's 'Stash'

"Stashed" assets of Kim Woo-choong, former CEO of the Daewoo Group, are coming to light one by one. According to some reports, a farm estimated to be worth 7 billion won ($5.5 million) and held in Mr. Kim's name was found, as well as real estate totaling a million square meters in his relatives' names. This is unbelievable, even if true. Have the creditor banks, which have received 21 trillion won in public funds, made any efforts at all to reclaim non-performing loans? And what was the supervisory authority doing?

Creditor banks may have assumed a complacent attitude, thinking they could always retrieve the loans because many of Daewoo's borrowings were personally guaranteed by Mr. Kim. It is also true that real estate in Mr. Kim's name or his relatives' names can be easily found by computer search.

Even so, if they have taken Daewoo's recent situation into account, the creditor banks should have diligently sought out his hidden assets and salvaged loans.

At present, the situation of Daewoo Motor is utterly grave. Although it is not clear whether the company can be sold, creditors are extending 5 billion won in new loans daily, and 6,000 managers and workers have left so far. Mr. Kim has been put on the wanted list amid allegations of accounting fraud and creating slush funds, while Daewoo's professional managers are on trial.

Daewoo Labor Union's assertion makes sense: "It is problematic to lay off only workers, leaving the most responsible person intact."

The owners of ailing companies should be held accountable in order for there to be legal grounds to prevent illegal actions committed by other interested parties, such as labor unions, in the course of restructuring. Of course it will not do if corporate owners are punished as in a witch hunt. But it is not acceptable if hidden assets are not properly tracked down, when the owners have committed illegal actions and they are clearly responsible for their companies' failure.

It is wrong if creditor banks and the supervisory authorities have not exercised their right to indemnity, which is their obligation and right. Creditors should do their utmost to locate hidden assets and make efforts to redeem them for their own recompense. They should bear in mind that for this very reason the Korea Deposit Insurance Corporation has been newly endowed with the right to investigate assets of the owners of ailing companies.
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