Daewoo chiefs jailed and fined

The collapse of Daewoo hit the whole Korean economy

A South Korean court has sentenced 19 former executives at the collapsed Daewoo group for falsifying accounts and diverting funds.

In the largest fines ever levied in South Korea, the 19 ex-employees have been ordered to pay a total of 25 trillion won ($19.16bn, £13.5bn).

In addition to the fines, the court dished out jail sentences of up to seven years.

But there was no mention of the group's founder and chairman Kim Woo-Choong who is thought to be hiding abroad, and under whose orders the other executives say they were acting.

The judge noted that the corrupt behaviour of the officials had affected the whole economy and disrupted society as a whole.

Economic chaos

Kan Byung-Ho, the ex-head of the group's trading arm and Daewoo Motor company was sentenced to seven years in prison at a district court.

The court also ordered Lee Dong-Won, head of the group's financing company in the UK and two other former Daewoo executives to repay 20.7 trillion won that they had allegedly diverted abroad from the group.

The Daewoo case involved economic crimes which were continuously and systematically committed by its corrupt owner and managers

Judge Jang hae-chang

More modest fines of 20 million won ($15,320) were imposed on the affiliates Daewoo Electronics, Daewoo Heavy Industries, Daewoo Corp and Daewoo Motor.

The judge noted that the collapse of the Daewoo group had thrown the whole economy into chaos and trampled social responsibility and corporate ethics.

"Although the accused claim they, as mere employees, had no other choice but to follow orders from the chairman Kim Woo-Choong, they turned their back on their responsibility to protect shareholders," said senior judge Jang hae-Chang.

The Daewoo group collapsed in August 1999 under $80bn of debt, the world's biggest bankruptcy.

All of the accused were found guilty and have the right to appeal.