DSME Facing Legal Action over Accounting Fraud

Written by Abdelmonem Achour on August 24, 2015. Posted in Shipping news

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 DSME’s 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.

Source: World Maritime News Staff

Tags: Daewoo Shipbuilding & Marine Engineering, lawsuit, ship arrest

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Abdelmonem Achour

Abdelmonem Achour is a Tunisian maritime lawyer. He specialises in both commercial and the litigation aspects of shipping, admiralty, marine insurance, transport, logistics, international trade and marine environmental law, as well as maritime casualty response and subrogated recoveries. He heads up the practice’s Admiralty and Shipping department and is the Transport Headlight leader. He has advised a number of commodity traders and their insurers, underwriters and brokers in international trade and recovery matters. Having obtained his BA LLB at the University of Tunis, he was admitted as an Attorney around ten years ago, is the senior partner of the firm and heads up the practice’s Admiralty and Shipping department. He also obtained a post-graduate diploma in Corporate Law.