By Park Si-soo
Staff reporter
The prosecution is investigating the nation's largest movie theater chain CGV, an affiliate of CJ Group, on suspicion of evading taxes by underreporting the number of cinemagoers.
The Seoul Eastern District Prosecutors' Office said Wednesday the CJ unit is suspected of having evaded taxes between 2005 and 2007 by intentionally underreporting 98,400 paid viewers out of its viewer record.
Tipped off about the alleged tax evasion last year, it raided three CGV offices including its headquarters in Sinsa-dong, southern Seoul, and the Korean Film Council last November.
``We've obtained sufficient data to know the exact number of paid viewers. Now we are closely looking into them,'' a prosecutor said.
About 60 other CGV theaters around the country are also subject to investigation.
``We don't rule out the possibility of the funds raised via tax evasion being turned to slush funds,'' the prosecutor said.
However, the theater chain denies the allegation.
``The suspicion stems from unmatched viewer records between CGV and the Korean Film Council, the central data collector,'' said Lee So-rim, the in-house lawyer for CGV. ``The difference was caused by an unstable data sharing system between the two not by manipulation.''
CGV is one of the four biggest local movie theater chains along with Lotte Cinema, Megabox and Primus Cinema. It was selected as the best theater chain, according to a recent survey by Korean Film Council.
Having 519 screens in 64 theaters across the country, CGV is the largest theater chain in Korea, followed by Lotte Cinema with 373 screens at 49 theaters.