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Last Updated:  Monday, 31 March, 2003, 05:17 GMT 06:17 UK
Trade suspended in Korean giant
SK Group chairman Son Kil-seung
Son heads the third biggest business group in South Korea
Trade in a subsidiary of South Korea's third largest company SK Group has been suspended on the stock exchange and a senior executive has resigned over an accounting scandal.

The Korea Stock Exchange said it stop trading in shares of SK Global after an independent audit showed irregular book keeping and bad assets had wiped out its capital.

SK Global announced its chief financial officer Moon Duk-kyu would resign and take responsibility for the company's difficulties.

It also revealed another 500bn won ($400m) of previously undisclosed debt.

The trial of 10 leading executives of the parent company, including chairman Son Kil-seung, over accounting fraud and illegal stock transactions starts on Monday.

Irregular accounts

SK Global was put into receivership on 19 March after it was accused of falsifying earnings by more than $1.25bn in 2001 to cover losses.

SK Global reported a net loss of 297bn won in 2002 after writing down 477bn won in uncollectible debt repayment guarantees as losses in its balance sheet, the independent audit report said.

The Korea Stock Exchange did not say when the suspension of SK Global, which last traded at 4,000 won on Friday, would be lifted.

South Korea's new President Roh Moo-Hyun has promised to clean up big business, known as chaebols, which dominate the country's economy and are blamed for the financial crisis of 1997.

But on Friday, South Korea's Minister of Justice suggested the government might ease its crackdown, of which SK Group has been on the receiving end, because of the negative impact on the economy.




SEE ALSO:
Korean boss summonsed
05 Mar 03  |  Business


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