More details surface of overseas tax havens

Posted on : 2013-06-17 15:22 KST Modified on : 2019-10-19 20:29 KST
News Tapa continues to make public findings about prominent Koreans found to have stashed money abroad
 June 15. (News1)
June 15. (News1)

By Park Soon-bin, senior staff writer

The names of 170 South Korean residents using offshore tax havens were released this past weekend.

News Tapa, a non-profit online investigative journalism site, made a surprise announcement on its web site on June 15 giving the names of South Koreans who set up “paper companies” in tax havens.

In addition to the 30 names given so far, including former President Chun Doo-hwan‘s son Chun Jae-kook, the list also included around 140 other individuals and roughly a dozen companies.

The site explained that it was disclosing the first of its lists as part of an effort to solicit citizen engagement in the tax haven tracking project it has been conducting with the International Consortium of Investigative Journalists (ICIJ). Citizens can participate by clicking on a “participate” banner on the site (newstapa.com or newstapa.org) to share any information they have about people and companies appearing on the list.

The National Tax Service has already begun scrutinizing data for the newly named companies and individuals.

“There are more than 100 new names, so right now we’re starting by verifying their identities,” an NTS source said. “If we do find grounds to suspect tax evasion, we’ll go out there and begin an audit.”

Identities have already been confirmed for around 20 of the new names on the list. Most prominent among them are the owners of several large companies and their family members. One individual identified by the surname Chun, who is chief of a prominent shipbuilding company in Busan and a onetime chairperson of the Korean Women Entrepreneurs Association, has two sons who are listed as having set up paper companies in the British Virgin Islands. Another individual identified as Lee, who runs the kitchen appliance company Lihom Kuchen (formerly Bubang Techron), is also given as shareholder and president of a paper company in the Virgin Islands. Lee is the second son of Lee Dong-kurn, chairman of the Bubang Group and the Community Chest of Korea.

Unix Electronics, a company specializing in cosmetic equipment was also found to have set up a paper company in the Virgin Islands in the name of its chairperson (identified by the surname Lee) and executives through its Hong Kong subsidiary.

An especially troubling revelation was the discovery of six former employees of the Korea Deposit Insurance Corporation (KDIC) and one of its organizations, the Resolution & Finance Corporation, on the list. The individuals in question were found to have set up two paper companies in the Virgin Islands in the name of relevant executives and employees during the tracking and recovery of hidden offshore assets belonging to Samyang General Finance, which went bankrupt during the foreign exchange crisis of 1997-98.

The assets at the companies and details of capital transactions were not reported by the KDIC to the Financial Service Commission. Indeed, foreign exchange authorities were not even notified about the accounts of the two shell companies even after a reporting system for offshore financial subsidiaries and financial accounts was instituted in 2011.

The KDIC said the companies were established “to swiftly recover public assets following an internal examination of the relevant laws.”

“There was no intention whatsoever to evade taxes,” the corporation said.

 

Please direct questions or comments to [english@hani.co.kr]

 

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