By Choi Kyong-ae, Park Si-soo
AmorePacific is being investigated by the National Tax Service (NTS) and the Korea Customs Service (KCS) for allegedly violating tax and tariff laws.
The rare joint investigation is focused on Etude House, a popular brand of the nation’s biggest cosmetics maker, according to sources.
Etude House enjoys brisk sales in China and other Asian markets. The exact cause of the investigation has not yet been confirmed.
The NTS investigation bureau’s fourth division, which specializes in cases involving large companies, is in charge of the probe, they said.
“While the NTS investigation is underway, the KCS probe is almost complete,” said a source familiar with the case.
Another source said AmorePacific had admitted its wrongdoing and is currently talking with regulators over the amount of punitive taxes that will be imposed.
An AmorePacific spokesman admitted that the company had been under investigation by the NTS, but he denied any KCS involvement.
“It’s a regular tax inspection that takes place every four or five years,” he said, denying allegations that the probe started as a result of the company’s wrongdoing.
He also denied the alleged behind-the-scenes deal linked with its incubating center on Jeju.
“We first suggested to the government the idea of opening the center on Jeju Island in line with our long-term growth plan in which we are developing the island as a research and development hub,” he said.