By Kim Rahn
Staff Reporter

Daewoo Group founder Kim Woo-choong, who was taken into custody early yesterday morning after returning from nearly six years of hiding overseas, will be formally arrested on fraud charges as early as today, the prosecution said yesterday.

``The prosecution will seek an arrest warrant for Kim Wednesday night or Thursday morning after confirming his criminal charges. Although Kim’s health is in bad condition, arrest is inevitable considering public sentiment and the fact he has been on the run,’’ a senior prosecutor in charge of the case said on condition of anonymity.

The prosecutor then hinted that the probe will be focused on his suspected bribing of politicians to buy their influence prior to the collapse of the business group in 1999.

After arresting Kim, the prosecution will further question him for about 20 days before indicting him around July 5, he added.

Prosecutor General Kim Jong-bin told reporters that investigations into Kim will be conducted in strict accordance with the law.

Kim, 68, said Daewoo Group executives and creditors had suggested his escape.

He made the testimonies after he was taken to the Supreme Prosecutors’ Office upon his arrival at Incheon International Airport.

Kim said he had accepted the proposal of Daewoo executives and creditor banks to stay overseas while they discussed how to deal with the group’s bankruptcy, according to the prosecution.

He denied an allegation that former President Kim Dae-jung and ranking government officials suggested his stay abroad.

Kim did not return to Korea in October 1999 after attending a ceremony to celebrate the completion of a car parts factory in Yantai, China.

The former Daewoo chairman also said he had delayed his return to Korea so the trials of other Daewoo executives would not be affected and decided to come back to take responsibility for the group’s misdeeds after the trials.

Kim also testified that he acquired French nationality in 1987 to expand his business operations to Eastern Europe. He also said he had stayed in France, Germany, Sudan and Vietnam, and had heart surgery in Germany in 2001.

The prosecution will first question him over the suspicions that he directed manipulated financial figures worth 41 trillion won so the group could obtain 9.9 trillion won in bank loans. Kim is also suspected of having transferred 25 trillion won to overseas bank accounts through Daewoo’s secret financial group in London.

Investigators should easily be able to prove the suspicions, considering former and incumbent Daewoo executives were already handed guilty verdicts for the accounting fraud charges in April. But regarding the suspicion of smuggling company funds, Kim claimed he used the money for the company and is being victimized.

After the indictment, the prosecution will also investigate the allegation that he provided illegal funds to politicians to seek their help in preventing the group’s collapse.

The former chairman departed the Vietnamese city of Hanoi on an Asiana Airlines flight with four people accompanying him, arriving at the airport around 5:30 a.m.

He had planned to read a short statement at the airport to apologize to the public for the damage his group caused to the nation’s economy. But the prosecution prohibited him from reading it, so Kim briefly told reporters that he came to take responsibility and is sorry for the Daewoo issue.

Regarding Kim’s testimony, Yu Si-yol, then-president of Korea First Bank, the main creditor bank of Daewoo, denied Kim’s claim. He said it is nonsense that the bank, which needed to collect loans, suggested the group head leave the country.

rahnita@koreatimes.co.kr