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Sat 27 Jan 2007 12:00 AM

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Doosan fined US $4.4 million for fraudulence

South Korea's anti-trust regulator has imposed a US $4.4 million (KRW)4.1 billion) fine on Doosan Industrial Development for illegally funding affiliated companies, reported The Korea Times.

South Korea's anti-trust regulator has imposed a US $4.4 million (KRW)4.1 billion) fine on Doosan Industrial Development for illegally funding affiliated companies, reported The Korea Times.

The company, which is the construction arm of Doosan Group, is also accused of paying interest for the money that Doosan Vice Chairman, Park Jeong-Won and 27 other executives borrowed from banks to take part in the company's capital raising in 1999.

To cover the interest cost, estimated to be some $312 million, the construction firm allegedly manipulated accounting records, the Fair Trade Commission (FTC) said.

Late last year, Doosan Industrial Development was fined $213 million by the Securities and Futures Commission for a series of accounting irregularities between 1995 and 2005.

The company is suspected of having inflated profits and assets by some $308 million, and raised a fund worth millions of dollars for its executives by overstating payments to subcontractors.

The FTC demanded the firm dismiss the executives responsible for the scam and designated auditors on Doosan for the next two years.

Doosan Industrial Development also faces allegations that it illegally financed its affiliated firms in early 2000 when they were suffering financial difficulties.

It invested millions of dollars in Neoplux, a business consultancy, and Doosan Motors, an automobile importer, after raising funds through accounting frauds.

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