<http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3K5PYKUIC&live=t rue&useoverridetemplate=ZZZUGORQ00C&tagid=ZZZNSJCX70C&subheading=global> Prosecutors to launch global hunt for Daewoo founder By John Burton in Seoul Published: February 5 2001 19:30GMT | Last Updated: February 6 2001 01:38GMT South Korean prosecutors plan to indict up to 30 Daewoo executives and launch a global search for Kim Woo-choong, the group's founder, for alleged involvement in one of the world's biggest accounting frauds, which led to the conglomerate's collapse. Mr Kim, once one of Korea's most respected businessmen, fled in 1999 as Daewoo's financial problems erupted and has since been reported as hiding in countries including France, Germany, Sudan and Morocco. Eight senior Daewoo executives, including the former heads of its car, shipbuilding and trading units, were arrested last week as prosecutors probed allegations that they had inflated the group's assets by Won41,000bn (£22bn) to hide Daewoo's troubled finances and persuade banks to make new loans. The executives claim that Mr Kim oversaw the accounting fraud as Daewoo encountered severe problems in servicing $80bn in debts due to Korea's financial crisis in 1997 and troubled economies in emerging markets where most of Daewoo's overseas units are based. "The signs are pointing in one direction and that is upward towards Mr Kim," said one former top financial adviser to Daewoo. "But the prosecutors will need to question Mr Kim to prove their case for accounting fraud." Prosecutors also want to question Mr Kim about allegations that he may have embezzled funds from a secret $20bn London-based fund, that was used to help finance Daewoo's extensive overseas operations. Mr Kim is suspected of secretly owning property and funds in addition to $1bn in declared assets he transferred to creditors under a 1998 debt restructuring programme. Prosecutors may have problems interrogating the former Daewoo chairman since he has stayed mostly in countries that do not have extradition agreements with Seoul. Officials are considering cancelling his passport to force Mr Kim to return to Korea. The case is sensitive since Mr Kim built his industrial empire over 30 years through close connections with some of Korea's leading politicians, who are suspected of having received funds from Daewoo. The group rapidly expanded through the takeover of state-run companies in Korea and followed a similar strategy abroad. Prosecutors, who launched the Daewoo probe last September, are rushing to make arrests since the statute of limitations for some Daewoo executives is due to expire in the next few weeks. Daewoo's trade union has complained about the slow pace of the investigation and yesterday offered to send its own search party to find Mr Kim. A spokesperson for the union said they had been told Mr Kim, had been spotted in Nice, in the South of France, as well as at a golf course in Palm Beach, Florida.
