ID :
21213
Thu, 09/25/2008 - 18:28
Auther :
Shortlink :
http://m.oananews.org//node/21213
The shortlink copeid
After Daewoo's fall, Kim Woo-choong leaves legacy of hard work, passion By Kim Hyun
SEOUL, Sept. 25 (Yonhap) -- Beaten but unbowed, Kim Woo-choong, the former chairman of the dismantled Daewoo Group, held his head high and resolutely kept his eyes shut as prosecutors called out the charges against him in a recent hearing.
Asked by the judge to give a final statement, Kim said: "Over 40 years, I did my
best with my life. Not knowing what was wrong, I worked hard no matter what ... I
will submit to whatever comes as the result."
A man who prided himself on working hard, transforming a small textile firm into
a global conglomerate, stood trial again nearly a decade after his illustrious
career ended in the world's largest default scandal. After years abroad as a
fugitive, the ailing tycoon served jail time for accounting fraud and
embezzlement in 2006. On Thursday, he was convicted again for hiding assets worth
115 billion won (US$99.6 million) subject to forfeiture.
But the Seoul Central District Court allowed Kim to walk, saying the crime was
unintentional and pointing out that he had voluntarily reported the assets. But
the ruling was hardly comforting to Kim, 72, once a legend who set the pace of
Korean business before his shameful fall in 1999, at the height of the Asian
financial crisis.
"There'd be this surge of anger in him from time to time," Baik Kee-seung, a
former Daewoo Group spokesman and close confidant to the former chairman,
recalled in a recent interview.
"No wonder he suffers emotionally. He was given much more burden to bear than he
was responsible for."
Kim was a politics-savvy businessman who elbowed his way to the top when
authoritarian governments controlled the economy. Kim's global business satiated
former President Park Chung-hee's mantra that resource-strapped South Korea could
survive only through exports. With low-interest loans and mergers tied to
government favors, Daewoo absorbed textile, construction, auto and shipbuilding
companies to own more than 390 corporations abroad and become South Korea's
second-largest conglomerate.
But as the rules of business changed, Kim stayed the same.
Amid the Asian financial crisis that drove the country to the brink of default,
the Kim Dae-jung government broke away from a decades-old, pro-conglomerate
policy and toughened up on shady accounting maneuvers to force out debt-ridden
companies. Daewoo faltered on the changed rules, and collapsed under 89 trillion
won, or roughly US$80 billion, in debt.
Baik and many former Daewoo employees believe Kim was the scapegoat of the Korean
government, which forced U.S. standards -- such as a debt-to-equity ratio below
200 percent -- onto local firms.
"Interest rates and the exchange rates soared in the financial crisis, and
Daewoo's debts went up. People thought, 'Oh, Daewoo has a problem.' It's a large
firm with lots in play. They suddenly blocked loans and it was bound to fall,"
Baik said.
During his 32 years in the group as CEO, Daewoo went from making money with
labor-intensive businesses -- such as textiles to be sold to the U.S. -- to a
global enterprise that competed with Western giants in emerging markets of
Eastern Europe, Africa and Central Asia.
Kim learned to be entrepreneurial from his hard times as a child. His father, a
former governor of Jeju Island, was abducted to North Korea during the Korean
War, leaving the young Kim to provide for his family.
At age 14, he showed a knack for selling more, faster.
As a newspaper boy, Kim was the first one to the marketplace every morning. Not
wanting to lose customers to other boys, he came up with a clever tactic:
keeping correct change ready in his pocket. Then, another idea occurred to him:
throw newspapers first and collect money on the way back.
"Often I say the Korean War made me who I am today. Through the hardships in the
war, I entered the world at an early age," Kim wrote in his 1989 book, "The World
Is Wide, There Is Much to Be Done," which sold a million copies and was published
in English with the title, "Every Street Is Paved With Gold: The Road to Real
Success."
Graduating from Yonsei University with a degree in economics, Kim was employed by
a textile importer in 1960 before starting his own firm, Daewoo, meaning "Great
Universe," in 1967. He was 31.
In its first decade of operation, Daewoo's sales were entirely based on exports.
For an emerging firm like Daewoo, the overseas market was an ocean yet to be
tapped by older conglomerates like Samsung, Hyundai, Lucky Co. or Goldstar, the
latter two of which would later merge to become LG.
Daewoo built the first South Korean overseas branch in Sydney in 1969, and won
South Korea's first-ever order to build an overseas factory in 1978 -- a tire
factory in Sudan.
As Daewoo expanded, Kim called work his hobby and refused to indulge in the usual
pleasures of other rich tycoons: alcohol, women and golf. In the mornings would
shave and wash, and then eat in his car on his way to office in the morning;
late-night flights became routine on overseas trips.
"We worked twice as much as other companies. We worked not nine to five, but five
to nine," he wrote.
He says he had no time to reflect on life until the death of his first son,
Seon-jae, in 1990. Seon-jae, an MIT student, died in a traffic accident on his
way to a New York airport to greet his mother. He was 23.
"Looking back, I was too hard on my family," Kim says in "Dialogue," a 1991 book
he co-wrote with philosopher Kim Yong-ok.
"If I had bought Seon-jae a better car, if I had contacted the New York branch
and let them meet my wife ..." he says. "After I suffered my son's accident, I
came to understand my employees, their pain. Before that, I knew nothing. 'Work
hard! Why do you grieve over such things?' I used to shrug it off."
It is generally believed that the workaholic chief was a pest to the U.S. He
built factories in Lybia and Iran, countries classified as "hostile" by
Washington, and outbid General Motors to acquire carmakers in Poland and the
Ukraine.
He was the first South Korean tycoon to visit North Korea to discuss business
cooperation. He was also the one who last met North Korean founder Kim Il-sung
before his sudden death in July 1994.
"It's almost an established theory that the United States wasn't comfortable with
Daewoo," according to "The Secret History of Daewoo's Fall," a 2005 book written
by Korea Economic Daily reporters who covered Daewoo.
Kim's success was a double-edged sword at the end. His buying sprees, aversion to
job cuts and accounting maneuvers to inflate profits couldn't be tolerated by
U.S.-educated, reform-minded financial officials in the Kim Dae-jung
administration. He called them "pedantic," and they called him "swindler,"
according to "Secret History."
In the last months before Daewoo collapsed, Kim humbled himself to get loans. He
appealed to the president and finance officials in personal visits, and handed
over his managerial rights and private assets in return for the government's
injection of 4 trillion won. Industry watchers say the loan was part of the
government's scheme to remove the management and dissolve the ailing
conglomerate.
Kim fled overseas, even though he later claimed that he did so under the
government's directive to contain political controversy. During his six years as
a fugitive in countries such as France and Vietnam, he was vilified at home as an
incapable fraud who destroyed the lives of thousands of Daewoo employees.
After returning home, he was sentenced to eight-and-a-half years in prison and
ordered to forfeit 17.9 trillion won for fraud and embezzlement, along with
several former Daewoo executives who were also jailed. A month after the
conviction, Kim was discharged from prison due to his deteriorating health after
twice undergoing surgery.
He was pardoned by presidential amnesty in December last year. Thursday's verdict
will be perhaps the last judicial punishment for Kim, who came to the courtroom
in a white patient suit and a wheelchair.
"He was vilified as an incompetent, corrupt, shameless man," Baik said. "But
today, companies like Samsung and LG are following in Daewoo's footsteps, doing
global business. He was a man who had passion. He failed and caused trouble to
the economy. But the fact he tried to do something -- that is still valid today."
hkim@yna.co.kr
Asked by the judge to give a final statement, Kim said: "Over 40 years, I did my
best with my life. Not knowing what was wrong, I worked hard no matter what ... I
will submit to whatever comes as the result."
A man who prided himself on working hard, transforming a small textile firm into
a global conglomerate, stood trial again nearly a decade after his illustrious
career ended in the world's largest default scandal. After years abroad as a
fugitive, the ailing tycoon served jail time for accounting fraud and
embezzlement in 2006. On Thursday, he was convicted again for hiding assets worth
115 billion won (US$99.6 million) subject to forfeiture.
But the Seoul Central District Court allowed Kim to walk, saying the crime was
unintentional and pointing out that he had voluntarily reported the assets. But
the ruling was hardly comforting to Kim, 72, once a legend who set the pace of
Korean business before his shameful fall in 1999, at the height of the Asian
financial crisis.
"There'd be this surge of anger in him from time to time," Baik Kee-seung, a
former Daewoo Group spokesman and close confidant to the former chairman,
recalled in a recent interview.
"No wonder he suffers emotionally. He was given much more burden to bear than he
was responsible for."
Kim was a politics-savvy businessman who elbowed his way to the top when
authoritarian governments controlled the economy. Kim's global business satiated
former President Park Chung-hee's mantra that resource-strapped South Korea could
survive only through exports. With low-interest loans and mergers tied to
government favors, Daewoo absorbed textile, construction, auto and shipbuilding
companies to own more than 390 corporations abroad and become South Korea's
second-largest conglomerate.
But as the rules of business changed, Kim stayed the same.
Amid the Asian financial crisis that drove the country to the brink of default,
the Kim Dae-jung government broke away from a decades-old, pro-conglomerate
policy and toughened up on shady accounting maneuvers to force out debt-ridden
companies. Daewoo faltered on the changed rules, and collapsed under 89 trillion
won, or roughly US$80 billion, in debt.
Baik and many former Daewoo employees believe Kim was the scapegoat of the Korean
government, which forced U.S. standards -- such as a debt-to-equity ratio below
200 percent -- onto local firms.
"Interest rates and the exchange rates soared in the financial crisis, and
Daewoo's debts went up. People thought, 'Oh, Daewoo has a problem.' It's a large
firm with lots in play. They suddenly blocked loans and it was bound to fall,"
Baik said.
During his 32 years in the group as CEO, Daewoo went from making money with
labor-intensive businesses -- such as textiles to be sold to the U.S. -- to a
global enterprise that competed with Western giants in emerging markets of
Eastern Europe, Africa and Central Asia.
Kim learned to be entrepreneurial from his hard times as a child. His father, a
former governor of Jeju Island, was abducted to North Korea during the Korean
War, leaving the young Kim to provide for his family.
At age 14, he showed a knack for selling more, faster.
As a newspaper boy, Kim was the first one to the marketplace every morning. Not
wanting to lose customers to other boys, he came up with a clever tactic:
keeping correct change ready in his pocket. Then, another idea occurred to him:
throw newspapers first and collect money on the way back.
"Often I say the Korean War made me who I am today. Through the hardships in the
war, I entered the world at an early age," Kim wrote in his 1989 book, "The World
Is Wide, There Is Much to Be Done," which sold a million copies and was published
in English with the title, "Every Street Is Paved With Gold: The Road to Real
Success."
Graduating from Yonsei University with a degree in economics, Kim was employed by
a textile importer in 1960 before starting his own firm, Daewoo, meaning "Great
Universe," in 1967. He was 31.
In its first decade of operation, Daewoo's sales were entirely based on exports.
For an emerging firm like Daewoo, the overseas market was an ocean yet to be
tapped by older conglomerates like Samsung, Hyundai, Lucky Co. or Goldstar, the
latter two of which would later merge to become LG.
Daewoo built the first South Korean overseas branch in Sydney in 1969, and won
South Korea's first-ever order to build an overseas factory in 1978 -- a tire
factory in Sudan.
As Daewoo expanded, Kim called work his hobby and refused to indulge in the usual
pleasures of other rich tycoons: alcohol, women and golf. In the mornings would
shave and wash, and then eat in his car on his way to office in the morning;
late-night flights became routine on overseas trips.
"We worked twice as much as other companies. We worked not nine to five, but five
to nine," he wrote.
He says he had no time to reflect on life until the death of his first son,
Seon-jae, in 1990. Seon-jae, an MIT student, died in a traffic accident on his
way to a New York airport to greet his mother. He was 23.
"Looking back, I was too hard on my family," Kim says in "Dialogue," a 1991 book
he co-wrote with philosopher Kim Yong-ok.
"If I had bought Seon-jae a better car, if I had contacted the New York branch
and let them meet my wife ..." he says. "After I suffered my son's accident, I
came to understand my employees, their pain. Before that, I knew nothing. 'Work
hard! Why do you grieve over such things?' I used to shrug it off."
It is generally believed that the workaholic chief was a pest to the U.S. He
built factories in Lybia and Iran, countries classified as "hostile" by
Washington, and outbid General Motors to acquire carmakers in Poland and the
Ukraine.
He was the first South Korean tycoon to visit North Korea to discuss business
cooperation. He was also the one who last met North Korean founder Kim Il-sung
before his sudden death in July 1994.
"It's almost an established theory that the United States wasn't comfortable with
Daewoo," according to "The Secret History of Daewoo's Fall," a 2005 book written
by Korea Economic Daily reporters who covered Daewoo.
Kim's success was a double-edged sword at the end. His buying sprees, aversion to
job cuts and accounting maneuvers to inflate profits couldn't be tolerated by
U.S.-educated, reform-minded financial officials in the Kim Dae-jung
administration. He called them "pedantic," and they called him "swindler,"
according to "Secret History."
In the last months before Daewoo collapsed, Kim humbled himself to get loans. He
appealed to the president and finance officials in personal visits, and handed
over his managerial rights and private assets in return for the government's
injection of 4 trillion won. Industry watchers say the loan was part of the
government's scheme to remove the management and dissolve the ailing
conglomerate.
Kim fled overseas, even though he later claimed that he did so under the
government's directive to contain political controversy. During his six years as
a fugitive in countries such as France and Vietnam, he was vilified at home as an
incapable fraud who destroyed the lives of thousands of Daewoo employees.
After returning home, he was sentenced to eight-and-a-half years in prison and
ordered to forfeit 17.9 trillion won for fraud and embezzlement, along with
several former Daewoo executives who were also jailed. A month after the
conviction, Kim was discharged from prison due to his deteriorating health after
twice undergoing surgery.
He was pardoned by presidential amnesty in December last year. Thursday's verdict
will be perhaps the last judicial punishment for Kim, who came to the courtroom
in a white patient suit and a wheelchair.
"He was vilified as an incompetent, corrupt, shameless man," Baik said. "But
today, companies like Samsung and LG are following in Daewoo's footsteps, doing
global business. He was a man who had passion. He failed and caused trouble to
the economy. But the fact he tried to do something -- that is still valid today."
hkim@yna.co.kr
