by Yoo Seungki
SEOUL, July 4 (Xinhua) -- Daewoo Shipbuilding & Marine Engineering, one of South Korea's top three shipbuilders, is being rocked by estimated trillions of won (billions of U.S. dollars) of accounting fraud amid the ongoing restructuring process for Daewoo as well as other two shipbuilders.
Former chief executive of Daewoo Shipbuilding was summoned by prosecutors on Monday for questioning over the suspected accounting fraud.
Koh Jae-ho, 61, who headed the troubled company from 2012 to 2015, appeared in the Seoul Central Prosecutors' Office to be questioned about whether he ordered the rigging of account books, after his predecessor Nam Sang-tae who had led the company for six years from 2006 was arrested last week.
Koh has been accused of ordering an accounting fraud to overstate operation profits from 2012 to 2014 by underestimating production costs in 40 offshore energy projects such as oil rigs and drilling ships.
Daewoo Shipbuilding posted operating profits of 440.9 billion won in 2013 and 471 billion won in 2014 each, but the company earlier this year restated operating losses of 778.4 billion won in 2013 and 742.9 billion in 2014 respectively to better reflect write-offs from the offshore energy projects.
In terms of equity capital, the amount of accounting problems is estimated by prosecutors to have reached 5.4 trillion won (4.7 billion U.S. dollars) from 2012 to 2014. Prosecutors are now looking into all of about 500 shipbuilding and overseas energy projects, raising possibility for additional accounting fraud uncovered.
Read the full story at Xinhua
PacificSentinel Note: While this story isn't directly military, it should be remembered that DSME is a major Warship builder for the RoK Navy.