Lee at center of controversies

By Kim Jae-won

CJ Group Chairman Lee Jay-hyun, 53, is a controversial figure credited with successfully transforming a food company into one of the nation’s biggest conglomerates, but has also been investigated during a series of scandals, including tax evasion, corporate fund embezzlement and possible involvement in a contract killing.

Industry watchers agree that Lee, the grandson of the late Samsung Group founder Lee Byung-chull, played a key role in turning Cheiljedang into Korea’s 14th-largest group, by expanding its business into media, entertainment and logistics industry. Cheiljedang was initially a food affiliate of Samsung, and Lee took the helm of the group in 2002 after the company spinning off from Samsung in 1993.

Thanks to the smooth transition in the 1990s and 2000s, the group now enjoys a leading position in the country’s media, movie and entertainment industry through its key affiliates, such as CJ CGV, the nation’s biggest movie theater chain, and CJ E&M which runs tvN, one of the most popular cable channels of the country.

However, his business legacy was often hit by a series of scandals. In 2008, a financial manager of the group surnamed Lee was indicted over allegedly ordering a contract killing against a private moneylender who did not pay back his money.

The prosecution suspected that Chairman Lee was involved in the case and quizzed him over it, but failed to indict him due to a lack of evidence.

Later in the year, the prosecution informed the tax authorities that the group hid 300 billion won of assets at some 500 banking accounts under names “borrowed” from the group’s former and current executives. As the National Tax Service moved to investigate the case, the group paid 170 billion won of back taxes voluntarily, avoiding further accusation.

And earlier this year, the prosecution chased Lee after broadening its investigation into his alleged tax evasion, corporate fund embezzlement and stock manipulation. Investigators raided the main office of the group in May and quizzed executives of the company since then, pressuring him further. Earlier this month, the Seoul Central District Prosecutors’ Office arrested CJ Global Holding Vice President surnamed Shin, hinting that Lee’s summons was imminent.