Founder of Daewoo business group dies

Kim Woo-choong Daewoo Corp grew into South Korea's second-largest business empire before collapsing.
Kim Woo-choong Daewoo Corp grew into South Korea's second-largest business empire before collapsing.

Kim Woo-choong, founder of the now-collapsed Daewoo business group whose rise and fall symbolised South Korea's much turbulent rapid economic growth in the 1970s, has died aged 83.

Kim died of pneumonia on Monday night at a hospital in Suwon, just south of Seoul, with his family at his side, according to the Seoul-based Daewoosky Institute, an organisation of former Daewoo executives and employees. Kim was honorary chairman of the institute.

Born in 1936, when a single Korea was under Japan's 35-year colonial rule, Kim started as a textile salesman and built Daewoo Corp in 1967.

The company later grew into South Korea's second-largest business empire, producing everything from cars, ships, TV sets, refrigerators and other electronics to clothes.

His rise represented South Korea's explosive economic development engineered by then-authoritarian leader Park Chung-hee, who nurtured a small number of conglomerates such as Daewoo with cheap loans and tax benefits during his 1961-79 rule.

A self-proclaimed workaholic, Kim was a role model for youths in South Korea, who dreamed of achieving a similar rags-to-riches story.

However, his debt-ridden expansion strategy ran into trouble when South Korea was hit by the 1997-98 Asian financial crisis and banks tightened their purses.

In 1999, Daewoo collapsed and its affiliates were placed on a debt-workout program in the country's largest corporate bankruptcy.

Before its collapse, Daewoo had 41 affiliates at home and 600 branches and subsidiaries overseas, employing 350,000 employees worldwide, according to Daewoosky Institute.

After the collapse, Kim fled the country and lived in hiding for years to avoid criminal punishment over fraud allegations.

He returned to South Korea in 2005 after almost six years of living abroad.

Kim served time in prison as he received a 10-year sentence for embezzlement and accounting fraud charges but was released under a presidential pardon in 2007.

He separately received a prison sentence for stashing away company funds but that sentence was suspended so he avoided jail.

Australian Associated Press