NTS extends tax probe to SK Chairman Chey

By Kim Jae-won

SK Group Chairman Chey Tae-won and his family are expected to undergo tax investigations, according to the National Tax Service (NTS), Friday.

“We have recently decided to extend the scope of its investigation into SK Group to its chairman Chey and other major shareholders,” a ranking NTS official said, asking not to be named.

The extension came after the agency found suspicions that SK Telecom and its affiliates conducted dubious stock transfers among themselves. They are also suspected of overseas tax evasion.

Since mid-November, the tax agency has carried out a regular tax audit on SK Telecom, a telecommunication service affiliate of the group.

The NTS said last month that it sent a regular audit team to the headquarters of the mobile phone carrier and has since been conducting an examination of accounts there. It is also carrying out an audit on SK Telesys, a supplier for SK Telecom, and two other 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,” the NTS official said, asking not to be named. “Officials from the first division are leading the ongoing audit but we may send officials from the Fourth Audit Division in charge of special audits if the first team uncovers anything irregular,” he added.

Market watchers speculate that the tax agency has secured evidence of SK Telecom's tax evasion. It is believed that the NTS suspects SK Group of building up a slush fund through tax evasion using SK Telesys and 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 fund and who is the real owner of the contractors. It is also expected to observe the stock movement of the related companies. The NTS has been conducting a regular audit of large companies, including Samsung Everland and LG Uplus since last month.