Gov’t accused of providing blind support to Daewoo Shipbuilding

An opposition lawmaker accused the government of providing support funds to troubled shipbuilder Daewoo Shipbuilding and Marine Engineering Co. despite acknowledging many difficulties facing the company.

Rep. Hong Ihk-pyo of the main opposition Minjoo Party claimed the government was also aware of accounting fraud the company committed to hide its heavy losses.

Citing what he claimed to be a document listing the agenda for an Oct. 22 meeting held at the presidential office Cheong Wa Dae where the administration supposedly decided the fate of Daewoo Shipbuilding, the opposition lawmaker said the government had acknowledged the possibility of the company going defunct.

The administration still decided that policy lenders, including the Korea Development Bank, would inject 4.2 trillion won (US$3.66 billion) in additional funds to keep the company afloat, he said.

The 23-page document, titled Support Measures for Normalization of Daewoo Shipbuilding, was released by Hong.

Currently, the state-run KDB alone carries a debt exposure of 4.5 trillion won to Daewoo Shipbuilding.

While refusing to confirm Hong’s accusations, the Financial Services Commission, the top financial regulator that had its chief present at the Oct. 22 meeting, questioned the authenticity of the document itself, noting that the so-called West Wing Meeting at Cheong Wa Dae was held behind closed doors.

The government earlier refused demands from opposition parties to release the minutes for said meeting, citing the possible negative impacts they may have on the market.
Source: Yonhap