Investigators have revealed senior management paid out massive bonuses to each other during the period of acute accounting fraud from 2012 to 2015. During that period a total of KRW490bn ($420m) was paid out in bonuses during the tenure of Koh Jae-ho as ceo. Koh became the second former DSME ceo to be arrested this week over the more than $5bn accounting fraud that has rocked one of the world’s largest shipyards and put it on an extremely fragile financial footing.
Koh is reported to have pocketed around KRW700m in bonuses himself.
“We are looking into whether the former chief gave excessively generous bonuses with the intention of preventing whistle-blowing on the corruption of the management,” a source at the prosecutor’s office in Seoul was quoted as saying.
On Wednesday, Koh was arrested on charges of illegally borrowing around KRW40trn after manipulating accounts to make it look as if the company was in the black.
It turns out that DSME made losses in 2013 and 2014, despite originally reporting it was in the black.
“We will find a way — whether through persuasion or filing of lawsuits — to claw back the bonuses paid in 2013 and 2014 once the Financial Supervisory Service’s inspection is completed,” a DSME spokesperson told local media.
