Founder of Daewoo Group, a symbol of its rise and fall, dies
SEOUL: The founder of the defunct Daewoo Group, Kim Woo-choong, has died after watching the conglomerate he built into a symbol of South Korea’s manufacturing prowess become one of its biggest corporate failures, crushed by debt.
Kim, who died on Monday at 83 after battling chronic illness, had led what was once the country’s secondlargest conglomerate, symbolising South Korea’s meteoric rise from the ashes of the 1950-1953 Korean War.
“We have never forgotten his expansive vision that if we get out of this small land, there is hope in the world,” said Huh Chang-soo, chairman of conglomerate GS Group and the head of a lobby group, the Federation of Korean Industries (FKI).
“But Kim leaves a mixed legacy that underscores the activities of the conglomerates or chaebol dominating the economy,’’ said Park Sang-in, a specialist in corporate governance at Seoul National University. “The late Kim epitomises the good and bad sides of South Korean chaebol.”
“The country’s conglomerates grew through cozy relationships with authoritarian governments, focused on growth over profitability, and made excessive investments that resulted in the Asian financial crisis,’’ he added.
Kim began as a fabric salesman who invested about $5,000 in a textiles company to start Daewoo in 1967.
Pouring in enormous energy and exploiting close ties to South Korea’s leaders, he parlayed it into a behemoth that employed more than 300,000 people in 110 countries at its peak, with interests ranging from automobiles to construction, shipbuilding, trading and securities.
In 1989, Kim published a book that galvanised a new generation of South Koreans with bright dreams for the future. Titled It’s a Big World and There’s Lots to be Done, a million copies were sold within six months. Its English version was called Every Street is Paved With Gold.
But Kim’s aggressive leveraged expansion, which swelled the group to 41 affiliate companies, helped push South Korea to the brink of national default during the Asian financial crisis of the late 1990s.
Once admired as a hero, Kim fled South Korea in 1999 when Daewoo collapsed and its affiliates were placed on a debt-workout programme in the country’s largest corporate bankruptcy.
Parts of Daewoo were broken up and sold, with Detroit-based General Motors Corp acquiring a major stake in Daewoo Motors to create GM Daewoo in 2002.
In 2005 Kim returned home after almost six years of living abroad, mostly in France, only to be arrested and sentenced to 10 years in jail for embezzlement and fraud for covering up the debt.
But in 2007, an appeals court cut 1½ years off the term, saying Kim had done South Korea a service by forming the group. That year he also received a presidential pardon.
Business groups regretted Kim’s death. “What he started bore fruit,” said Huh of the FKI. “We now stand as a nation with global trade that makes its way through oceans and continents.”