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Seoul / AFP
Prosecutors on Wednesday raided Daewoo Shipbuilding and Marine Engineering Co., one of South Korea’s three giant shipbuilders, as part of a probe into a $2 billion accounting fraud.
Some 150 staff from the Supreme Prosecutors’ Office stormed DSME headquarters in Seoul and its Okpo shipyard on the southern island of Geoje, the company said.
“This morning, they started collecting accounting books, computer hard disks and other documents,” a spokesman for the company said.
DSME faces allegations it manipulated its financial statements in 2013 and 2014 in order to make it appear financially healthier than it really was.
Prosecutors have imposed travel bans on former CEO Nam Sang-Tae, who led the company from 2006 to 2012, and Ko Jae-Ho, who succeeded him until last year.
In January, auditors filed a petition with prosecutors calling for a probe into suspected accounting irregularities.
More than 400 shareholders have also launched a lawsuit against the company and Ko claiming $21 million in compensation for losses suffered when the firm’s shares fell because of the alleged fraud. DSME is accused of hiding $2 billion of losses from 2013 and 2014.
Auditors argue the shortfall was then factored into its 2015 accounts, when the company reported a 5.1trn won net loss — six times higher than the previous year. DSME and two other South Korean shipbuilding giants — Hyundai Heavy Industries and Samsung Heavy Industries — have enjoyed a decade of uncontested global dominance.