DSME Facing Legal Action over Accounting Fraud

zoom Shipbuilding conglomerate Daewoo Shipbuilding and Marine Engineering (DSME) is facing a lawsuit on the grounds of an alleged fraud against individual investors. Namely, South Korean law firm Hannuri Law has revealed plans to file a joint lawsuit in September against the shipbuilder and Deloitte Anjin accounting firm on behalf of retail investors, who are reported to have lost over KRW 2.2 trillion (USD 1.9 billion) following DSMEs announced loss. Daewoo Shipbuilding reported a loss of KRW 3.03 trillion in July, confirming media predictions that saw the shipbuilder’s shares plunge by 30 % earlier this month. The investors believe that the two parties were involved in an accounting fraud scheme that resulted in retailers losses. Specifically, DSME attributed its losses in 2015 to its marine plant orders won since 2011, which, according to the report from 2014 earned over KRW 400 billion in operating profits every year since 2011. The law firm expects that the law suit would help clamp down on the rampant accounting frauds in the shipbuilding and construction industry and help the shareholders get the compensation for their extensive losses. World Maritime News Staff