184 to be investigated for offshore tax evasion
Chun Jae-kook
By Na Jeong-ju
The Financial Supervisory Service (FSS) said Tuesday that it is examining a total of 184 South Koreans who allegedly violated the country’s foreign currency transaction law.
They are suspected of having used paper companies in offshore tax havens to dodge taxes and stash away secret funds.
They include a number of high-profile figures, including Chun Jae-kook, the eldest son of former President Chun Doo-hwan, Hanjin Shipping Chairwoman Choi Eun-young, actress Yoon Suk-hwa, Yoon’s husband Kim Seok-ki, former CEO of the now-defunct Joongang Mutual Savings Bank, and OCI Chairman Lee Soo-young.
The crackdown was prompted by the recent revelations of Koreans who have been operating ghost firms in the British Virgin Islands and other tax havens by the Korea Center for Investigative Journalism.
FSS officials said they have obtained documents detailing currency transactions by the suspects from financial firms.
“We will summon them for questioning, if needed,” an FSS official said. “Any violators will face heavy penalties. The cases will then be referred to the prosecution and the National Tax Service.”
Chun Jae-kook set up and operated a bogus company named Blue Adonis in the Virgin Islands through Arab Bank’s branch in Singapore. There are suspicions that he used the company to launder a slush fund amassed by his father in the 1980s.
Prosecutors raided the residence of the former President on Tuesday in an effort to collect a massive amount of unpaid fines levied on him. It is believed that he stacked up a massive amount of secret funds estimated at 200 billion won during his seven-year rule.
“We are looking into how the junior Chun was able to transfer money to the branch in Singapore. Other suspects are also being investigated on similar suspicions of tax evasion and illegal currency transfer,” the FSS official said.
According to the regulator, offshore tax evasion by Koreans has become more sophisticated since the mid-2000s.
Many of the suspects allegedly used false names to avoid investigators and facilitate their money laundering activities. They failed to report to the authorities when they remitted money to their overseas accounts and purchased properties using the money.
The FSS officials said they will cross-check financial transactions made by the suspects, their colleagues and their family members to secure evidence.