S Korea probes businessmen over tax evasion

Featured Korea - May 30th, 2013

A prominent South Korean businessman is under scrutiny over allegations of tax evasion, the latest target of Seoul’s probe into overseas financial arrangements made by the country’s powerful conglomerates to avoid tax.

Prosecutors raided the home of Lee Jay-hyun, chairman of the conglomerate CJ Group, as part of an investigation into “allegations of tax evasion through overseas bank accounts”.

Lee had allegedly funneled money from CJ Group, which covers sectors ranging from pharmaceuticals to entertainment, to secret offshore accounts in tax havens.

South Korean authorities have launched an investigation into 23 companies and individuals suspected of tax evasion through shell companies in tax havens, reports the Financial Times.

This comes following the International Consortium of Investigative Journalists’ release of data showing investments in tax havens. NewsTapa, its Seoul-based partner, said that it had identified 245 South Koreans who had set up companies in tax havens. NewsTapa said it plans to publish details of its findings over the months.

South Korea’s conglomerates, or chaebol, were thrust into the spotlight at a time when a series of high-level corruption scandals rocked the nation.

Since becoming president, Park Geun-hye has vowed to institute “economic democratization” to rootout the bad practices of the country’s corporate elite.