hankyoreh

Former Doosan Group chairman Park Yong-sung and his brother Park Yong-maan have returned to their managerial positions in the company after being accused of embezzlement and accounting fraud.

The two were appointed executive directors of Doosan Heavy Industries & Construction at the general shareholders’ meeting on March 16, despite opposition from several shareholders and civic activists. The appointment means that former chairman Park will again be granted managerial rights over the firm only 15 months after his resignation due to the scandal surrounding the embezzlement accusations in November 2005. In July 2006, both Yong-sung and Yong-maan received a five-year suspended sentence in an appeals court for embezzling company funds and raising a large-scale slush fund, but was pardoned by President Roh Moo-hyun in February of this year.

Heads of major firms are often pardoned by presidents in the hopes that their return to work will stimulate the economy.

Park Yong-sung is also president of the International Judo Federation and member of the International Olympic Committee.

The embezzlement and slush funds scandal surfaced during a power struggle between three of the Park brothers over control of the Doosan Group. Another brother, Park Yong-ho, reported to the prosecution that Park Yong-sung had committed fraud only a few days after Yong-sung had asumed the chairman of the Doosan Group as Yong-ho’s successor.

The March 15 shareholders’ meeting lasted for about six hours and was full of heated exchange. Members of the watchdog group Solidarity for Economic Reform (SER), who were deputized by several shareholders to participate in the meeting in order to protect shareholders’ rights, raised an objection to the Park brothers’ resuming managerial control. However, other participants in the meeting tried to prevent the SER members from speaking.

At the meeting, Kim Sang-jo, director of the SER, asked, "Is it true that Park Yong-sung and Park Yong-maan, who call themselves large shareholders of Doosan Heavy Industries & Construction, actually don’t own a single share of the firm?" In response, Lee Nam-du, president of Doosan, replied, "Why do you ask already known facts?"

Doosan Heavy Industries & Construction is an affiliate of the Doosan Group.

Kim then turned the question to the Doosan Group. "How do you call them large shareholders? They own just a 3.24-percent share of Doosan Group," Kim said, to which Lee responded, "Even if they don’t own a stake in the company, they can exercise their control properly as large shareholders of Doosan Corporation, [another Doosan Group affiliate] and their corporate responsibility means they are going to take the proper responsibility in line with their level of control," said Lee.

Lee, who was presiding over the meeting as president and CEO of Doosan Heavy Industries & Construction, continued to wage a war of nerves with Kim throughout the meeting. Kim demanded that his questions be addressed individually, whereas Lee said he would only respond to all of Kim’s questions in one answer, telling him to group all his questions together.

Through the general shareholders’ meeting, it was found that clients of Doosan Heavy Industries & Construction had been told that Park was still chairman, even though he had stepped down in December 2005.

"As a company whose orders were mostly from foreign countries, it needed to maintain a chairman with a big name value. For this reason, the company allowed him to maintain his title [continuously]," Lee said.

Please direct questions or comments to [englishhani@hani.co.kr]