Prosecutors Summon Lee Sang-young, Chairman of Daewoo Industrial Development, Over 'Accounting Fraud'

The prosecution investigating allegations of embezzlement and breach of trust involving approximately 80 billion won by current and former executives of Daewoo Industrial Development has summoned Lee Sang-young, the key suspect and chairman of Daewoo Industrial Development.

View of Daewoo Industrial Development Seoul Office in Jung-gu, Seoul.
[Image source=Yonhap News]

According to the legal community on the 16th, the Tax Crime Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Min Kyung-ho) called Lee this morning in the capacity of a suspect and is currently questioning him.

The prosecution is reportedly pressing Lee on the circumstances of his private use of company funds, whether he was aware of or involved in the accounting fraud by former Daewoo Industrial Development CEO Han Jae-joon.

Lee is accused of embezzlement under the Special Act on the Aggravated Punishment of Specific Economic Crimes for diverting 14.086 billion won of company money under the pretext of loans over 17 occasions from January 2013 to May last year, and using it for personal purposes such as stock investments. He is also charged with breach of trust under the same act for using about 1.8 billion won of company funds for personal use from 2020 to last year, including spending 3.05 million won with a corporate card at a wine bar in Gangnam, Seoul, in May 2020. Additionally, he is accused of causing damage to the company by paying approximately 416 million won in salary to his brother, Lee Mo, who is unrelated to the company, from 2016 to last year.

Considering the embezzlement and breach of trust suspicions against another key suspect, former CEO Han, the prosecution estimates that the breach of trust damage to Daewoo Industrial Development caused by them amounts to about 56 billion won, and the embezzlement damage to about 27 billion won. Han is also under investigation for violating the External Audit Act by conspiring with company accounting staff to falsely disclose financial statements, failing to properly account for bad debt reserves on uncollectible receivables worth approximately 35.1 billion won, and underreporting based on false contracts.

The prosecution previously summoned and questioned former CEO Han twice on the 11th and 14th. Based on the results of Lee’s questioning today, they are expected to decide whether to request an arrest warrant and determine the direction of the case handling.

This content was produced with the assistance of AI translation services.