The company found out about the existence of the slush fund while conducting an internal audit in July 2014.(image:Kobizmedia)
SEOUL, Feb. 27 (Korea Bizwire) — POSCO E&C has confirmed to have exposed illegal fundraising of about 10 billion won (US$ 9.1 million) by executive members of the company’s Vietnam branch, on February 26. Judicial authorities are likely to launch a formal investigation, since Prime Minister Lee Wan-goo has ordered further examination of the case.
The company found out about the existence of the slush fund while conducting an internal audit in July 2014. Several executive members of the company’s Vietnam branch received rebate money from local subcontractors via accounting fraud from 2009 to 2012. The branch was working on a multitude of projects such as new cities and road development in Vietnam.
Although some are suggesting that a number of the executive members embezzled a part of rebate money, POSCO E&C said that it has yet to uncover any evidence supporting such claims. The company removed two involved executives from their posts in August last year. The company issued warnings to a dozen other employees involved in the case.
An individual related to POSCO E&C said that the company conducted the audit on every single employee involved in the illegal fundraising operation, and decided not to report the case to the authorities as it was concluded that no embezzlement had taken place during the incident.
By J.W. Choi (summerchoi@koreabizwire.com)
