By Kim Jae-won
The tax authority is investigating Hyundai Engineering and Construction, the country’s largest builder for tax evasion, according to government and industry sources.
The National Tax Service (NTS) sent 20 investigators to Hyundai’s main office in Seoul Thursday morning and retrieved finance-related files.
Company officials downplayed the probe, saying it was just a regular audit on business between 2009 and 2011. Other sources believe that the tax agency may have acquired substantial evidence related to unpaid taxes and has started to move on it.
“There is nothing special about the audit. It is a just regular audit which every company undergoes,” said a Hyundai spokesman.
The NTS refused to confirm or deny the investigation and by experience that is normally regarded as a “yes,” according to the sources.
“You don’t dispatch that many investigators at once on a regular audit. It had the look of a serious investigation based on allegations of tax crime. There could be something big behind it,” said one industry veteran.
“In regular audits, the NTS notifies the company in advance before sending investigators. They didn’t this time and their visit was a surprise. Obviously they didn’t want to give the company the opportunity to tamper with any evidence.”
According to another source, the NTS has started a 100-man special team dedicated to investigating Hyundai. Using personnel of that quantity is very rare.
Industry watchers wonder whether the audit will spread to other companies in the sector. The NTS often audits companies in the same industry simultaneously.
Sources say there is a possibility that the tax agency wants to look into the company’s involvement in the much disputed national project to “renew” the country’s four biggest rivers, the Han, Nakdong, Geum and Yeongsan.
The Fair Trade Commission said that big builders colluded in the massive state project in which total orders reached about 22 trillion won.
Hyundai E&C is a construction affiliate of Hyundai Motor Group. The group bought a controlling stake in the firm from creditors last year in a move to find a new revenue stream.