Report: Former DSME CEO Sentenced to 10 Years over Accounting Fraud

Ko Jae-ho, the former head of the ailing South Korean shipbuilder Daewoo Shipbuilding and Marine Engineering (DSME), has been sentenced to 10 years in prison by a lower court in Seoul over accounting fraud, Yonhap News Agency reports.

The Seoul Central District Court found Ko, who held the position of DSME’s President and CEO from 2012 to 2015, guilty of altering accounts and figures in 2013 and 2014 to inflate assets as well as of obtaining loans by using faked financial statements.

Although he was charged with accounting fraud for 2012, the court freed Ko of charges due to a lack of evidence.

Furthermore, DSME’s former vice president has been given a seven-year sentence as he was involved in the fraud case.

In July 2016, Ko was called in for questioning as part of an accounting probe into the financial reports of the shipbuilder.

Subsequently, Ko was formally accused of taking part in an accounting fraud worth KRW 5.4 trillion (USD 4.6 billion).

The newest decision by the court comes only a day after Jung Sung-leep, DSME’s President and CEO since May 2015, was interrogated by prosecutors as he has been reportedly charged with underreporting some KRW 120 billion in business losses in 2015.

DSME received around KRW 21 trillion in loans between 2013 and 2015 reportedly on the back of a higher rating achieved through fraudulent conduct.

World Maritime News Staff