Daewoo Shipbuilding & Marine Engineering’s (DSME’s) CEO and his two predecessors are denying that misconduct led to its recently announced loss of KRW3 trillion (USD2.5 billion) from offshore plant orders.
CEO Jung Sung-leep has been testifying, along with Ko Jae-ho and Nam Sang-tae, to an enquiry by South Korea’s National Assembly.
“Change of offshore plant orders occurred during the construction and couldn’t be predicted,” Jung told the assembly’s Political Affairs Committee. “No illegalities were involved in the process.”
But the committee accuses the DSME of being burdened by “parasitic appointments” of former politicians or government officials to its board of directors.
While these figures had official responsibilities to oversee DSME, they were actually paid hefty salaries without doing real work, resulted in lax management, losses, and a “ring of corruption”, according to the committee.
DSME posted a KRW2.4 trillion loss for the second quarter of 2015 and its KRW15 trillion debt is set to worsen.
The committee is examining the troubled company for the state-owned Korea Development Bank (KDB), which had been DSME’s main creditor and shareholder.