BUSINESSWEEK ONLINE : FEBRUARY 19, 2001 ISSUE
INTERNATIONAL BUSINESS Daewoo: The Prosecutors' Case LONDON SLUSH FUND Prosecutors charge that a London-based shell company called BFC raised slush funds for lobbying at home and abroad. The account included bogus import-export transactions of $2.6 billion, plus $1.5 billion in transferred car export revenues. ACCOUNTING DODGE To book profitable results at a failed factory in Ukraine, Daewoo Motor got fully built Korean cars, tore them down, reassembled them at the Ukraine plant, then booked the sales as if produced by the plant. Value of all Daewoo Motor manipulations: $3.6 billion. INFLATING ASSET VALUES Daewoo Heavy Industry artificially generated profits in 1998 by selling assets to Daewoo Motor at inflated prices to produce a profit, when it actually posted a loss of $670 million. Asset values inflated by $4 billion. DECEITFUL BORROWING Daewoo Electronics took out a loan of nearly $1 billion from financial institutions in 1997 after concealing that losses had wiped out shareholders' equity. Value of inflated equity: $2.9 billion. Data: Korean state prosecutors _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Kim's Fall from Grace at Daewoo TABLE: Daewoo: The Prosecutors' Case INTERACT E-Mail to Business Week Online

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