Probe targets CJ chief's elder sister
Lee Mi-kyung CJ E&M vice chairwoman
By Yun Suh-young
The prosecution put travel bans on three sibling CEOs of the CJ Group Wednesday to investigate CJ Group Chairman Lee Jae-hyun for alleged tax evasion and improper donations of company money to his relatives.
The Seoul Central District Prosecutors’ Office said Thursday it suspects Lee of allegedly transferring 50 million won to his children in cash without paying gift taxes as well as excessively giving favor to his siblings’ companies to help them expand their businesses.
His siblings who are also facing investigation are his older sister Lee Mi-kyung, vice chairwoman of CJ Entertainment & Media (CJ E&M), and his younger brother Lee Jae-hwan, CEO of JS Communications, an advertising company independent from CJ. Although JS Communications has no relation to CJ Group as it is 100 percent independently run by younger brother Lee, the company is still subject to scrutiny as most of their ads are shown in CJ-owned movie theaters.
Chairman Lee is accused of giving millions of company money as wages to his sister and taking over a subsidiary of CJ America run by her, resulting in financial damage to the group.
Lee’s older sister is an influential figure in the entertainment and movie industry. As vice chairwoman of CJ E&M since 2005, she has personally directed major investments in movies and television series.
She wields enormous power in the industry by pushing forth with projects even if the majority of her subordinates or the public disagree. A few examples include the movies “My Way” (2011) by director Kang Jae-kyu, “R2B: Return to Base” (2012) featuring Rain and “Masquerade” featuring Lee Byung-hun. Lee invested in the latter two because she supported the two actors.
CJ officials say celebrities try to become part of her inner circle because once they get her support, they can receive offers for appearances very easily.
She is also known to have a global network of foreign entertainment names. Lee, who has a master’s degree from Harvard, expanded her foreign network by suggesting co-establishing Dreamworks with Hollywood in 1994. Her network includes movie director Steven Spielberg, animation director Jeffrey Katzenberg and producer David Geffen, as well as music producer Quincy Jones who sang at her birthday party in Seoul in 2011. Actress Jessica Alba is also an acquaintance and attended one of her parties in Gangnam last April.
CJ E&M currently produces movies, TV dramas, musicals, cable TV series and commercials. It has 18 cable TV channels under its wing, which Lee personally takes care of.
CJ’s sales of movies took up 36.7 percent of the total Korean movie market last year.