[THE INVESTOR] The Export-Import Bank of Korea poured 1.8 trillion won ($1.5 billion) into an ailing shipbuilder for six years without keeping proper tabs on it, the Board of Audit and Inspection said on June 15.

According to the BAI, the EXIM Bank neglected its duty in monitoring Sungdong Shipbuilding and Marine Engineering Co., 70.71 percent of whose shares are held by the bank.

The shipbuilder has been under creditor-led restructuring since 2011.

In laying out the recovery plans, the shipbuilder and the bank had agreed to limit the number of contracts taken on at a loss to maintain the company’s operating rate at a certain level to 22 ships per year. 

However, the limit was raised to 44 when the agreement was amended, increasing the projected operating loss by 58.8 billion won.

The BAI also found that EXIM Bank had approved Sungdong’s application to take on a project, without analyzing the details. According to the auditor, the shipbuilder reduced the expected costs when reporting to the bank, managing to slip 12 substandard contracts past it.

In addition, it has been revealed that EXIM Bank approved Sungdong’s revival plans despite the company’s related efforts being given the lowest ratings for five consecutive years.

By Choi He-suk (cheesuk@heraldcorp.com)