The Seoul headquarters of Korean shipping company Polaris Shipping has been raided by local authorities over an alleged breach of trust by co-CEOs Kim Wan-joong and Han Hee-seung only a few months after the company was put up for sale.
Investigations into the alleged crime are only the latest issues for the company after Kim was sentenced to six months in prison in 2020 for failing to report known defects aboard the Stellar Daisy before it sank in March 2017, though that case is currently in the middle of an appeal at the South Korean Supreme Court.
According to reports, the latest investigation covers the misappropriation of Won50bn ($37.8m) lent to Polaris’ holding company, Polar Energy & Marine, to secure the company’s management rights.
In addition to adding to Kim’s legal woes, the raid could also complicate the sale of the company, which was reportedly entertaining 20 different takeover bids, including China’s Cosco Shipping, at an estimation of around $425m.
Despite being one of the largest bulker operators in the world, the company is likely best known for the sinking of the Stellar Daisy, a very large ore carrier (VLOC) converted from a very large crude carrier (VLCC).
One of the largest ships ever lost at sea, the Stellar Daisy, went down in the South Atlantic, taking 22 of its 24 crew members with it. A report into the sinking determined that a catastrophic structural failure of the ship’s hull was to blame.
A number of other issues were subsequently found with the company’s other VLCC to VLOC converted ships before Polaris sold its last vessel of this type for scrap in 2021.
