The Daewoo Group - Korea's $50 Billion Fraud

Daewoo group was once the second largest company in South Korea with $80 billion in annual revenue and 300,000 employees. However, the company collapsed in 1999 due to excessive amounts of debt and accounting fraud.

0:00 - 2:41 Intro
2:42 - 8:36 The rise of Daewoo
8:37 - 12:45 Debt and fraud
12:46 - 16:24 The collapse
16:25 Aftermath and implications



#Wallstreetmillennial

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[saynotopw]

The effects of the 1997 economic crash is still felt today in Korea with weak middle class and uneven recovery across regions. The rich got richer, poor countryside became ghost towns, and a giant shift in focus in economy from manufacturing to entertainment happened. All because of literally few handful of conglomerate owners couldn’t help their greed.

[ogarzabello]

Too bad and even sad, I still have a fridge and a mini split from Daewoo after more than 20 years, and the only maintenance they have needed is cleaning, amazing quality.

[hollyroom]

I used to have a Daewoo Lanos. I remember as the company was going bankrupt I was pumping gas at a gas station. This woman at the pump next to me looked over at me and said "Daewoo, more like, Daewon't". It was such a humorous moment. Definitely my favorite memory of that car.

[murlimenon]

Adani Group in India seem to adopt the same template. The govt gifted them with large infrastructure projects; the banks lent money, the financial institutions propped up their stocks; the rating agencies gave them best ratings and the regulator looked elsewhere. As of now the group is battling the aftermath of the Hindenburg report. But time will reveal how the story ends.
Thanks for the Daewoo story; never realised that they were frauds.

[lil----lil]

The saddest thing is that at one point there were actually all legitimate business and hardworking people. At some point GREED takes over and EVERYTHING went downhill from there. Ambition and hard-working alone will only get you so far but without wisdom, you will fall. and fall HARD.

[mibox]

Somebody once mentioned to me that the Daewoo automotive car logo looks like a jockstrap and I could never unsee that image again lol

[kapdolkim]

I was working in Korean when Daewoo went under. There is more to the story than just accounting fraud. ALL Chaebols cooked the books during the "IMF Era" starting in late 90s. A freind of mine, who owns a mid sized Korean conglomerate, was good friends with Chairman Kim (He even worked for him when he was younger). When Chairman Kim left Korea the media wrote threat he disappeared. But everyone knew where he was and the Korean government certainly could have brought him back to Korea. Heck, I was in my friend's office waiting for him to finish a call. He was talking to Chairman Kim at time when his whereabouts was supposed to be unknown. I was told no one wanted him back in Korea as he knew too many secrets (all of the corruption). So the Korean government just let him be in Vietnam, etc. My freind also said "People only remember the last thing you did. They forget that Chairman Kim helped build Korea and created so many jobs and wealth for people."

[Ramboost]

I think the biggest pop culture impact of Daewoo in the West right now is that MadTV sketch where a wannabe yakuza character by Bobby Lee (Tank) is bragging about his "DAEWOO" in a Super Bowl tailgate

[robertwalko]

In the early 2000s, Daewoo established an automotive dealer network in the US, and I produced TV commercials for their store in the Orlando area. They we well aware of Daewoo's shaky financial status even as they tried to establish a beachhead in the market with a product lineup that quickly earned a reputation for poor build quality and unreliability. I was at the dealership the day GM announced the acquisition, and the employees saw it as a cause for celebration. Surely GM will firm up the foundation under the dealer network and the product reputation! What happened next took them utterly by surprise. GM pulled the brand from the US market, and the dealer network vanished like a puff of smoke.

[a.m.]

We had a Daewoo fridge that lasted over 15 years without any issues.

[harry]

I had a Daewoo AC and it never broke down and was extremely cool for 10+ years. I wondered what happened to them. What a shame.

[dosgos]

Daewoo cars were also aggressively promoted in Southern Europe. They were inexpensive and bland; I don't know how well they were built.

[davidlea-smith]

As I watch this on my Korean made phone all I can think is that yes, fraud does occur everywhere, but in the Daewoo case the legacy was still a useful manufacturing industry that exists today. In the west the legacy of fraud, mostly in the tech and banking industry, is just a bunch of bankers spending their ill earned bonuses and not a damn thing built.

[thawhiteazn]

The word is “systemic”. The company is not “systematically important” to the Korean economy, it is “systemically important”, as in its important to the system. Systematic does not mean the same thing.

[Ramboost]

I am gonna put this in my watch later playlist since BobbyBroccoli (The Man Who Tried To Fake An Element) has an upcoming video series on Korea's cloning scandal and I think the fall of Daewoo is an important piece of the story so I won't spoil myself

[gswdeclan]

At least they gave us "You just got run over by a Daewoo Lanos"

[theworddoner]

I'm very wary about conglomerates. I just don't see how they are not bloated. The benefits of "synergy" is very questionable in a lot of these cases. I'm sure some conglomerates make sense but the vast majority should be money pits and ego projects. I'd stay clear of them.

[globalismoblackman]

The "Chaebols" house of cards lol 😅. The SK Mega Conglomerate enterprises efficiency myth now demystified. Wow 500x leverage ? 😲😱😱

[traviscrum]

I always think of Daewoo as a weapons company but forget how gd massive they really are

[Mandoboyband]

Could you do an investigation of Temasek Holdings in Singapore? They invest the government controlled pensions of all citizens and have lost billions over the last two decades and keep limiting what citizens can withdraw