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South Korea''s Chaebol, or the family-owned conglomerates, played an instrumental role in the post-war revival of the economy. The Korean government provided special incentives to Chaebol to realise their plans for economic development. But when the Asian financial crisis hit Korea, it had a disastrous effect on the economy and the overt nexus between the government and Chaebol was questioned, as some of the Chaebol went bankrupt, throwing light on the complexities involved in the Chaebol system. Economists started blaming the Chaebol for reckless expansion and required them to restructure to become more transparent. The case gives details about the origin of Chaebol and how the government''s excessively aggressive encouragement led to the remarkable progress of the Korean economy in a short time. There is also a discussion on how the Asian financial crisis and Chaebol''s expansion brought the country to its knees and how Daewoo, the biggest of the Chaebol, went bankrupt. This case can be used in conjunction with the case ''Chaebol Reforms'' (203-029-1).