The South Korean Supreme Court sentenced the former CEO of Daewoo Shipbuilding & Marine Engineering (DSME) to nine years in prison, Sunday, on charges of fraud totaling USD4.69 billion, local media reported.
The Supreme Court decided to confirm the lower court’s verdict in pronouncing him guilty, as Mr. Ko Jae-ho orchestrated the shipbuilder’s financial statements and plans for the fiscal year from 2013 and 2014, to cover up the company’s mounting deficits, according to the Court statement as quoted by Korea Times.
Namely, the 62-year-old man was arrested under suspicions of fabricating the company’s financial statements, during 2012-2014, by underreporting production costs and exaggerating profits expected from the company’s projects during his three-year term.
As explained, while DSME reported a 440 billion won profit in 2013 and a similar profit in 2014, it revealed later losses of 778 billion won and 742 billion won, respectively, due to accounting misreporting.
This helped the company to borrow billions of USD by using fabricated statements. In addition, booking non-existent profits enabled DSME to pay millions in employees’ bonuses.
The Court also sentenced former DSME chief financial officer Kim Gap-jung to six years in prison on the same charges. Kim said that Ko ordered him to fabricate the financial statements.
