LIG chairman, sons indicted for fraud

By Korea Herald
  • Published : Nov 15, 2012 - 19:29
  • Updated : Nov 15, 2012 - 19:29
Prosecutors on Thursday indicted LIG Group chairman Koo Cha-won and his two sons for inflicting damage on minor shareholders by fraudulently issuing commercial papers.

Koo Bon-sang, his first son and the largest shareholder of the group, was arrested last month. He is vice chairman of LIG Nex1, the group’s defense arm.

Koo Cha-won and his second son Bon-yeop, former vice president of LIG Construction, were charged without detention.

The three issued commercial papers worth some 215 billion won including 25.7 billion won in asset backed commercial papers between October 2010 and March 2011 under the name of the construction company that was on the verge of coming under court receivership.

The construction firm filed for receivership later that month after suffering financial difficulties caused by the recession in the local construction business and growing project financing loans.

The group is also suspected of submitting fabricated data to financial institutions to hide such facts and issue the bills.

The investigators said they suspect the Koo family masterminded the issuance of the notes prior to filing for receivership aimed at retrieving stocks mortgaged by the group’s shareholders, adding they will look into who led the fraudulent scheme and whether the group illegally exploited its affiliates’ fund to help the ailing construction firm.

(From news reports)