CJ boss face arrest for buying, selling artworks through third persons to evade taxes
CJ Group chairman Lee Jae-hyun may have used executives under him to buy and sell works of art to evade taxes and utilize slush funds to expand his wealth, sources at the state prosecutors' office said Sunday.
Insiders, who wanted to remain anonymous, said they have detected clues that point to the tycoon using numerous third persons in art transactions from 2005 onwards.
They claimed, without giving any details, senior executives at CJ bought 200-300 pieces of artworks, which were probably bought at the orders of the chairman and are currently in the process of trying to figure out where the money to make such large acquisitions came from.
"There are suspicions that money used may have come from slush funds Lee controlled," a sources speculated, adding that probes are underway to find and follow the so-called money trail in order to find the nature of the funds.
State prosecutors confirmed they questioned key executives under Lee over the weekend who knew about the chairman's methods of evading taxes and hiding his money.
One vice president of CJ Global Holdings, identified only by his family name of Shin, is to be indicted and put under arrest on Wednesday for his involvement in criminal activities, including embezzlement, tax fraud and dereliction of duty.
Investigators have speculated that Lee may have evaded taxes on 51.0 billion won ($44.2 million) worth of his earnings, embezzled 60.0 billion won in money from CJ CheilJedang Corp., one of South Korea's largest foodmakers, and caused damages to the CJ business group totaling 35.0 billion won by buying two buildings in Tokyo.
Lee has been summoned to appear at the state prosecutors' office on Tuesday with authorities likely to seek an arrest warrant after he is questioned.
The prosecution has summoned Lee to come in for questioning on Tuesday after which it will seek a warrant for his arrest on charges of tax evasion and embezzlement.