Daewoo Group-Daewoo Group was a major South Korean conglomerate and car manufacturer and founded by Woo Choong Kim in 1967. Later due to various corporate governance issues the company was shut down

1. Daewoo Group
 INTRODUCTION
 Daewoo Group was a major South Korean conglomerate and car
manufacturer and founded by Woo Choong Kim in 1967
 Daewoo was the second largest conglomerate in Korea after Hyundai Group,
followed by LG Group and Samsung. There were about 20 divisions under the
Daewoo Group, some of which survive today as independent companies
 By 1972, Daewoo became the 2nd largest exporter in Korea
 By 1996, it became the world’s largest transnational entity among developing
countries ,surpassing such companies as Xerox, Amoco, and Volvo

2. Pressures & Opportunities
 In 1988, Daewoo underwent a severe liquidity emergency
 Marketing conditions suddenly deteriorated
 Daewoo became more and more dependent upon the government
 The financial crises hits
 Excessive concentration of power: Chairman served as both
controlling shareholder and founder
 Structurally weak corporate governance: Substandard regulatory
oversight
 Generous government concessions: Loans, tax credits, subsidies,
protection

3. The Biggest Fraud in History”
• In 1997 and 1998, Daewoo conceals 21 trillion won in impaired capital
• Overstated its assets by 10.9 won
• Deflated its debt by 38.3 trillion won
• Overstates its capital by 26.9 trillion won
• At the same time, net losses for the company climbed
• In 1997, 11.8 trillion won ($7.87 billion)
• In 1998, 12.1 trillion won ($8.64 billion)
• was sentenced to 10 years prison for accounting fraud, embezzlement and
other crimes related to South Korea’s biggest financial scandal.

4. ACCOUNTING FRAUD-”VIOLATED LAWS AND
PRINCIPLES”
 Most of the misinformation involved the use of affiliates and overseas
accounts to reduce debts and manipulate export returns
 15 trillion won in off-balance sheet liabilities,4 trillion won in non-
performing loans,3 trillion won in false inventories
 1 trillion in false research and development expenses
 There were hidden columns in their excel spreadsheets hiding equipment
and equipment cost.
 Balance sheets stating the company’s assets, liabilities, and equity that had
inflated and deflated
 This was used to make the company look better than it really was at the
time