Prosecution investors believe they have found evidence of additional accounting fraud at Daewoo Shipbuilding & Marine Engineering Co., informed sources said Sunday, that, if confirmed, will point to more pervasive and prolonged illegal activities by the troubled company than previously thought.


According to the sources, who spoke on condition of anonymity, the prosecution have found evidence of accounting fraud worth trillions of won between 2006 and 2014.

Such a report follows the recent outcome of an audit by the state watchdog that concluded the ailing shipbuilder had rigged its books to hide up to 1.5 trillion won ($1.28 billion) in losses between 2013 and 2014.

The outcome of the probe by the Board of Audit and Inspection was based on an analysis of orders for 40 offshore plants won by the South Korean shipyard over the cited period.

The ongoing prosecution investigation, on the other hand, evaluated all 500-odd orders clenched by Daewoo Shipbuilding since 2006, according to the sources.

Additional findings by the prosecution also indicate that the company should have reflected a 2-trillion-won loss in its books in 2013-2014, instead of 1.5 trillion won cited by the state watchdog, they added.

Losses from the cited period reportedly remained hidden and snowballing until last year when the company reported an annual operating loss of 5.5 trillion won in an apparent one-time write-off known as a big bath.

The company, along with two other major shipbuilders here, are currently undergoing self debt-restructuring plans.

The three shipbuilders, including Hyundai Heavy Industries and Samsung Heavy Industries, reported a combined loss of 7.7 trillion won in 2015 alone. (Yonhap)