DSME probe uncovers billion dollar accounting hole

A 1.5 trillion Korean Won (US$1.3 billion) hole has been found in Daewoo Shipbuilding and Marine Engineering’s accounts, following an investigative probe into the company’s records.

In early June, the South Korean Board of Audit and Inspection (BAI) raided DSME’s headquarters in Geoje.

DSME’s accounting manipulation allowed the company to post profits of 323.7 billion won for the 2013 to 2014 period, instead of the net low of 839.3 billion that it actually recorded, The Korea Herald reported.

The company also deducted expenses reaching 2.58 trillion won for its marine related projects.

The BAI noted that the Korean Development Bank (KDB), a state-run bank and 49.7-per-cent shareholder in DSME, had neglected its duty to monitor the shipbuilder’s accounts.

According to BAI, KDB had not analysed the company’s finances since February 2013 – despite having a system in place to monitor irregularities in the books.

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