By Lee Hyo-sik
The prosecution will soon summon Taekwang Group Chairman Lee Ho-jin, 48, and his 82-year-old mother Lee Seon-ae, executive managing director of Taekwang Industrial, for questioning over their alleged roles in the creation and management of slush funds.
They will also likely be questioned on the alleged illegal transfer of wealth and group control to Chairman Lee’s children, and a number of Taekwang’s corrupt business deals.
The Seoul Western District Prosecutors’ Office Thursday raided the house of managing director Lee, suspected to be at the center of the group’s management of the slush funds, in central Seoul, and secured accounting books and other finance-related documents.
Last week, investigators raided Chairman Lee’s home and office, as well as the headquarters of Heungkuk Life Insurance, Goryo Savings Bank and other group affiliates, securing computer disks and confidential material.
On Oct. 18, they also searched the Seoul Regional Tax Office and confiscated tax-related documents concerning Korea’s 40th largest conglomerate. The allegation was that the tax office was lobbied by the scandal-ridden business group in early 2008 when it imposed nearly 100 billion won in inheritance taxes on Taekwang after discovering large sums of unclaimed funds within its subsidiaries.
Investigators have already questioned several key Taekwang executives to uncover how the group spent the slush fund and who it lobbied. Prosecutors plan to examine all the confiscated computer files and financial documents over the weekend before summoning Chairman Lee and his mother early next week.
After the questioning session, the prosecution is expected to announce investigation results and decide whether to indict Chairman Lee and the others involved in amassing massive slush funds and conducting illicit business activities.
A prosecution official said Thursday that investigators may seek an arrest warrant for Chairman Lee only, given Lee Seon-ae’s age.
The chairman has been suspected of having lobbied officials of Cheong Wa Dae, the Financial Supervisory Service and the Korea Communications Commission to win business favors over the years.
Taekwang has expanded its reach to cable TV and financial services industries.
Prosecutors suspect that Lee had bribed financial regulators to seek favors in the process of its acquisition of Heungkuk Life Insurance in 2006, while lobbying government officials and politicians to acquire multiple cable TV channel operator, Qrix Holdings in 2009.
The chairman has also been suspected of having masterminded an illegal wealth transfer to his children, embezzlement, breach of trust and other irregularities. He had allegedly transferred shares of group subsidiaries at lower than market prices to the unlisted company owned by his son.