SK Telecom under tax audit

By Kim Jae-kyoung

SK Telecom and other affiliates of SK Group are undergoing tax audits.

SK officials said that it was part of a regular audit, adding that the last one was conducted in 2006. Big firms undergo regular audits about every five years.

The National Tax Service (NTS) said Thursday that it sent its regular audit team to the headquarters of the mobile phone carrier Tuesday and has since been conducting an examination of accounts.

It is also carrying out an audit on SK Telesys, a supplier for SK Telecom, and two other of its subcontractors.

“We are examining SK Telecom as part of our regular audit. We have sent tax officials from the First Audit Division in charge of regular audits,” a ranking NTS official said, asking not to be named.

“Officials from the First Division is leading the ongoing audit but we may send officials from the Fourth Audit Division in charge of special audits in the case the first division team uncovers anything irregular,” he added, hinting that officials from the fourth division could also contribute.

Market watchers speculate that the tax agency has secured evidence of SK Telecom’s tax evasion. It is believed that the NTS seems to suspect SK Group of building up slush funds through tax evasions by using SK Telesys and its two other subcontractors, which deliver relay devices for the mobile phone carrier.

According to industry sources, the NTS is expected to focus on finding the whereabouts of the slush funds and who are the real owners of the contractors. It is also expected to observe the stock movement of the companies involved.

In the meantime, SK Telecom responded that the examination is part of NTS’ regular audit.

The NTS has been conducting a regular audit of large companies, including Samsung Everland and LG Uplus since last week.