DSME’s Former CEO Questioned over Accounting Fraud
- Business & Finance
The former Chief Executive Officer of Daewoo Shipbuilding & Marine Engineering (DSME), Ko Jae-ho, was called in for questioning as part of an accounting probe into the financials of the South Korean shipbuilder, according to The Korea Times.
Ko Jae-ho, who was at the helm of the company in the period from 2012 to 2014, is one of two key people related to the alleged accounting fraud worth KRW 5.4 trillion (USD 4.6 billion), along with his forerunner Nam Sang-tae.
The former CEO said that he feels responsible for the company’s financial situation, but he denied the accounting fraud allegation, The Korea Times added.
He is suspected of committing the accounting fraud by under-reporting production costs and exaggerating profits during his three-year term.
In June, Nam Sang-tae, who headed the shipbuilding company from 2006 to 2012, was questioned and was subsequently taken into custody due to allegations related to breach of trust.
Nam Sang-tae was suspected of playing a great part in the alleged accounting fraud as his actions reportedly led to a financial damage of more than KRW 10 trillion.
After they raided the ailing shipbuilder’s offices on June 7, the prosecutors’ probe found the accounting fraud and revealed that the company’s management undertook business projects without legitimate procedures.
The probe also found that the shipbuilder’s main creditor Korea Development Bank (KDB) reportedly failed to conduct proper inspections on DSME’s management.
KDB earlier said that one of the restructuring options for DSME would be streamlining the company to a dockyard specializing in liquefied natural gas (LNG) carriers, as this move could make the shipbuilder more competitive.
DSME posted a loss of KRW 5.13 trillion (USD 4.3 billion) for the full year of 2015.
World Maritime News Staff