[Yonhap News Photo]
A former Daewoo shipyard official has been arrested for embezzling a company fund of 15 million US dollars as state auditors Wednesday revealed a massive accounting fraud to win an uninterrupted injection of liquidity from creditors.
The Board of Audit and Inspection said in a report to financial regulators that Daewoo Shipbuilding and Marine Engineering, one of South Korea's three top shipyards, had indulged in window dressing worth 1.5 trillion won ($1.28 billion) in 2013 and 2014.
The accounting fraud was aimed at securing a bailout fund and hefty loans from creditor banks, some of them misused to provide a lot of bonuses to workers, it said.
The board's report coincided with an announcement by Daewoo Shipbuilding that police have arrested a 46-year-old former official, surnamed Lim, who was accused of using borrowed names and fabricated documents to steal some 18 billion won ($15.3 million) for eight years.
The shipyard on the southern island of Geoje has sucked more than seven trillion won in special bank loans and taxpayers' money since 2000.
Last week prosecutors raided the shipyard in a probe into allegations that former executives have been accused of manipulating financial statements to cover up huge losses in 2013 and 2014.
The Daewoo shipyard posted a first-quarter operating loss of 26.3 billion won and a net profit of 31.4 billion won on sales of 3.53 trillion won. However, it did not provide comparable figures because it has to revise earnings dating back to 2013.
Last year the shipyard, hit by a delay in the construction of offshore facilities and the cancellation of orders, posted a record net loss of 5.13 trillion won, compared with a profit of 33 billion won a year earlier.
Like other South Korean shipyards, Daewoo was the victim of a protracted slump in the global shipbuilding industry. Demand has been weak due to low oil prices while competition with Chinese rivals has intensified. Oil companies have reduced spending while rig owners have canceled orders or asked for delayed ship delivery.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
