SEOUL -- Former executives of South Korea's collapsed Daewoo business group on Tuesday were handed prison sentences of up to seven years for falsifying accounts and diverting company funds.

Kang Byung-Ho, the ex-head of the group's trading arm and Daewoo Motor Co., was sentenced to seven years in prison at a district court here. Six other former executives of the group were given jail sentences ranging between three and six years.

Twelve other former Daewoo executives received suspended prison sentences ranging from 18 months to three years but they will remain free on probation.

The group's founder and patriarch, Kim Woo-Choong, is on the run abroad.

Kim Woo-Choong and the 19 accused were charged with involvement in diverting millions of dollars between 1997 and 1998 in the course of raising $7.5 billion of foreign loans through Daewoo's overseas operations.

"The court finds all the accused guilty," Senior Judge Jang Hae-Chang said in his ruling. South Korean trials do not have juries.

"The Daewoo case involved economic crimes which were continuously and systematically committed by its corrupt owner and managers under the excuse of following old practices," he said.

The court also ordered Lee Dong-Won, Head of the group's Financing Company in Britain, BFC, and two other former Daewoo executives to repay 20.7 trillion won they had allegedly diverted abroad from the group.

Major economic crimes such as the Daewoo case, in which social responsibility and corporate ethics were trampled on, had to be sternly dealt with, the judge said.

The collapse of the Daewoo group as a result of a reckless expansion backed by debt financing, threw the whole economy into chaos, the judge said.

Investigations by prosecutors showed the group had changed official documents to inflate its assets by 41.7 trillion Won ($32 billion), AFP reported.

"Although the accused claim they, as mere employees, had no other choice but to follow orders from the chairman (Kim Woo-Choong), they turned their back on their responsibility to protect shareholders," he said.

According to AFP, by tampering with documents, Daewoo group affiliates could have cheated creditor banks of 11.6 trillion Won of bank loans, the investigators said.

Daewoo group, once South Korea's second largest "Chaebol" conglomerate, collapsed in August 1999 under $80 billion of debt, in the world's biggest bankruptcy. The collapse left local banks with massive bad debts.