CJ Group Chairman Lee Jay-hyun |
Hidden Wealth Estimated at Over W1 Trillion
By Park Si-soo
Staff Reporter
CJ Group owner Lee Jay-hyun is back in the spotlight once again over problems with a slush fund case dating back to last year.
Some estimate the hidden cash at some hundreds of billions of won, while others say it could reach more than one trillion won.
No matter what the answer may be, it is clear the amount must be huge as the state tax agency slapped a punitive tax of 170 billion won ($143 million) on Lee for hiding the money in accounts under other people's names and using other illegal measures.
The scale of Lee's slush fund was disclosed early this week in a courtroom by a former CJ financial executive, who oversaw the cash.
The executive, identified by his surname Lee, was indicted last year on charges of embezzling part of the ``black money'' and attempted murder.
He was given to six years in prison in an initial ruling, but an appellate court overturned the sentence, citing a lack of evidence.
Clearing him of the embezzlement charge, the Seoul High Court observed in its ruling, ``The previous guilty verdict was based on the belief that 17 billion won the accused had allegedly embezzled was a considerable portion of the owner's slush fund. Given the scale of the punitive tax, however, the 17 billion won was trivial.''
Based on the ruling, some suggest the amount of the slush fund hovered around 4 trillion won. Their presumption is based on the fact that former Samsung Group head Lee kun-hee paid 180 billion won in punitive tax in the process of bringing his 4.5 trillion won slush fund into the open.
CJ has refused to confirm the allegations.
``We have no idea,'' a CJ spokesman said. ``As far as I know, we have paid all related taxes.''
A recent news report demonstrated how the money was kept undetected by the tax authorities.
According to KBS news, the hidden wealth was mostly managed in the form of unregistered bonds and worth 120 billion won of these was used to buy expensive works of art, a widely used method among Korean billionaires to evade tax.
The report noted some of the money had also been ``invested'' in Casinos and loan sharking.
Citing unidentified sources, the report said the CJ owner sent a signed letter to the executive to express his gratitude for his managing of the unreported assets.
The prosecution is facing mounting criticism for what is widely viewed as its failure to thoroughly investigate the tycoon over suspicions that he had stashed away corporate funds for personal use.
The Seoul Central Prosecutors' Office confirmed Lee Jay-hyun had a slush fund estimated at around 53 billion won, but took no legal action against him.
Under the law, those who keep money in ``borrowed name'' bank accounts can be punished on charges of tax evasion or embezzlement.
In October last year, police also confirmed that Lee had kept money in nearly 90 accounts registered under the name of former and incumbent executives of the company.
The hidden wealth was found when police investigated a scandal in which the money manager and another former CJ executive allegedly hired hitmen to kill a gangster who failed to pay back a loan drawn on the funds belonging to the CJ owner.
In August 2006, the manager lent 17 billion won to the gangster, who promised to pay it back with high interest. But the gangster only paid back 10 billion won, and the financial executive, who lent the money allegedly without the knowledge of his boss, hired two men to kill the gangster. They failed in their attempt.
At that time, police said the money seemed to have been inherited from Lee's grandfather, the late Samsung founder Lee Byung-chull, who gave 90,000 shares of Samsung Fire and Marine Insurance to the CJ owner in 1987.
pss@koreatimes.co.kr
|
무디스, 스페인·伊·포르투갈 신용등급 강등
