South Korea’s parliament has started an investigation into how one of the nation’s largest shipbuilders has suffered such a swift and dramatic financial fall with corruption likely to the fore.
The National Assembly`s Political Affairs Committee is looking into how Daewoo Shipbuilding & Marine Engineering (DSME) managed to hide KRW3trn ($2.6bn) in losses through an alleged accounting fraud. It emerges DSME hired 60 people as consultants who received big salaries, vehicles and other benefits without actually doing any work. DSME was hit by so called ‘parachute appointments’, whereby former politicians and civil servants were given cushy jobs at DSME. Many consultants also came from the Korea Development Bank (KDB), DSME’s main creditor.
DSME has been hit hard by the low oil price and its strong focus on offshore construction, something that has also sent the nation’s two other shipbuilding giants, Hyundai Heavy and Samsung Heavy, into the red this year.
