Ex-DSME chief taken into custody

Christine Kim, June 29, 2016, 9:57 a.m.

Former Daewoo Shipbuiding and Marine Engineering CEO Nam Sang-tae was taken into custody early Tuesday amid the widening probe into a massive accounting fraud. The Seoul Supreme Prosecutors’ Office said it was holding Nam in its custody, following a half-day questioning on Monday as a suspect in the alleged window dressing. It has found new allegations and spotted signs of destroying evidence, it added. 

The office plans to ask the court to issue an arrest warrant for him on Wednesday. The 66-year-old, who ran the shipbuilder as its CEO from 2006 to 2012, is suspected of playing a key role in alleged accounting fraud amounting to 5.4 trillion won ($4.6 billion) over three years. 

He is also accused of giving business favors to his close colleague by distributing most of the company’s projects to the friend’s shipping firm when the friend’s company was suffering a deficit in October 2009. 
In return, Nam allegedly received shares of his friend’s company and dividends. 

The prosecution suspects that the shipbuilding company deliberately reported reduced losses from its marine plant businesses and several shipbuilding projects while exaggerating operating profits. Based on the fabricated accounting data, DSME took out massive loans from banks and issued corporate bonds. 

Prosecutors said that the window dressing led to financial damage of more than 10 trillion won.

Meanwhile, another former CEO Koh Jae-ho, who succeeded Nam, is also expected to be summoned later this month, the investigators said.

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