Uncovering hidden assets of debt-ridden company chairmen

A total of 178 people, including the former Daenong Group chairman Park Young-Il, former Geopyong Group head Na Seung-Ryul and ex-Nara Merchant Bank chief Kim Ho-Jun were discovered to have hidden assets worth a combined 61.5 billion won.

Korea Deposit Insurance Corp. (KDIC) announced Wednesday that it had uncovered their subterfuge through an investigation of the current status of assets held by them. All three were found to have caused losses to financial institutions that had received public funds before being pushed out of business.

The KDIC said the bankrupt company owners and executives concealed 59.5 billion won and that two major shareholders of exited merchant banks hid 2 billion won worth of assets. The KDIC filed a fraud cancellation suit to restore the status quo of the hidden assets and took claim preservation measures against these non-performing debtors. This is the first time that the KDIC took any legal action against debt-ridden company affiliates rather than against the executives or major shareholders of the exited financial institutions.

The KDIC director said that the company owners and executives have an obligation to repay the loans, since they promised joint liability on guarantee when their companies borrowed money in the name of the companies. At the same time, he noted that they hid their assets by donating or selling them to their families or friends on the day the financial institutions¡¯ business operations were suspended or their companies became insolvent.

Na Seung-Ryul, the former chairman of the Geopyong Group and also a major shareholder and debtor based on joint liability on guarantee of Saehan Merchant Bank, reported that he made provisional disposition of disposal prohibition in the name of his brother-in-law with respect to an apartment in Kangnam worth 700 million won on Feb. 20, 1998, 3 months before the business operations of Saehan Merchant Bank were brought to a halt. After doing so, he transferred its ownership to his brother in law in December 1998, and then sold it to a third party the following January.