Chairman Kim Yong-bin of Daewoo Shipbuilding & Marine Engineering Construction Indicted for 4.7 Billion Won in Unpaid Wages and Severance Pay

Merged with ongoing embezzlement case
2.1 billion paid... 2.68 billion unsettled

The prosecution has indicted Kim Yong-bin, chairman (51) of Daewoo Shipbuilding & Marine Engineering Construction and Korea Technology, for withholding wages and retirement payments totaling 4.7 billion KRW from over 400 workers.

On the 25th, the Criminal Division 6 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Lee Jae-man) announced that it had non-custodially indicted Chairman Kim and CEO A of Daewoo Shipbuilding & Marine Engineering Construction and Korea Technology on charges of violating the Labor Standards Act. This case will be consolidated with the ongoing trial against Chairman Kim, who is currently facing charges including violation of the Act on the Aggravated Punishment of Specific Economic Crimes (embezzlement) since last April.

According to the prosecution, Chairman Kim and others are accused of failing to pay a total of 4,756,550,000 KRW in wages and retirement benefits to 406 workers of Daewoo Shipbuilding & Marine Engineering Construction from May last year to January this year. There is also a charge of not paying 24,810,000 KRW in retirement benefits to one Korea Technology employee in August last year. Of this amount, 2.1 billion KRW has been paid, leaving an outstanding balance of approximately 2.68 billion KRW.

In a previous indictment, Chairman Kim was tried while in custody but was released on bail on the 12th of last month after his bail request was granted. The prosecution gave the released Chairman Kim a one-month opportunity to settle the payments, but as he made no effort to repay, they requested an arrest warrant on the 16th. However, the court dismissed the warrant, stating that "there is room to dispute responsibility for unpaid wages, so the right to defense must be guaranteed, and there is little concern about evidence destruction or flight risk."

The Labor Office had only listed CEO A as a suspect and transferred the case in September. However, the prosecution included Chairman Kim in the investigation, believing that his personal corruption and embezzlement triggered the wage arrears. The prosecution found that Chairman Kim misappropriated company funds by purchasing luxury goods with corporate cards and company money even while wage arrears were occurring. Chairman Kim also pressured and coerced workers who participated in the rehabilitation application by filing criminal complaints and urging them to sign settlement agreements.

Daewoo Shipbuilding & Marine Engineering Construction, which had no wage arrears, saw its financial structure rapidly deteriorate within three years after Chairman Kim's acquisition in 2019 due to his embezzlement of company funds. The cumulative operating profit in 2018 was 10.5 billion KRW, but the cumulative operating loss in the third quarter of last year reached 7 billion KRW.

Meanwhile, Chairman Kim is currently on trial after being indicted in April on charges of obtaining an unfair gain of 28.5 billion KRW by raising funds through private loans to avoid Korea Corporation's designation as a management item in December 2018, conducting a disguised paid-in capital increase, and inflating stock prices through false disclosures while entering the bio-business. Along with Korea Corporation CEO A, he is also charged with causing damages worth approximately 21.1 billion KRW by having Korea Corporation purchase worthless unlisted company stocks at inflated prices to exaggerate the value of the bio-business, which was the material for stock price boosting.

Although Daewoo Shipbuilding & Marine Engineering Construction was unable to pay its employees' salaries, Chairman Kim is also accused of embezzling 400 million KRW of corporate funds. Chairman Kim and others are charged with purchasing luxury goods using corporate cards, privately using a Porsche vehicle leased under the company’s name, and providing joint guarantees for private loans unrelated to Daewoo Shipbuilding & Marine Engineering Construction amounting to 5 billion KRW.

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