Last month, I did a blog entry on the power of empires in the South Korean market. Specifically, I was talking about the problems confronting Samsung.

The issue was in the news again this week when Kim Woo-choong, the founder of the former Daewoo Group who was sentenced in 2006 to eight and half years in jail for accounting fraud, got pardoned. The other ones who got pardoned were former spy agency chiefs convicted over the illegal tapping of phone conversations between the head of a leading newspaper and a top Samsung Group executive related to illicit campaign funds.

Kim Woo-choong was sentenced in 2006 to eight and a half years when he was found guilty of a range of charges including embezzlement and accounting fraud. Daewoo had gone under in 1999 with debts of $82 billion. Woo-Choong skipped the country. Accused of ordering his executives to lie in order to obtain loans and of smuggling money overseas, he eventually returned to South Korea in 2005 to face charges.

As Gavin Hinks, editor of Accountancy Age points out, it's a massive indictment of a system that allows people to get away with accounting fraud:

"That means he served a little more than a year for his crime. Even taking into consideration his good behavior, that something of a result for a man associated with a massive corporate disaster. Just goes to show that in some places white collar crime remains only marginally more serious than parking on a yellow line."

It speaks volumes about the standards of corporate governance and the rule of law in South Korea.