Prosecutors to question CJ chairman Tuesday

By Kim Jae-won

Lee Jay-hyun CJ Group Chairman

CJ Group Chairman Lee Jay-hyun, the grandson of the late Samsung Group founder Lee Byung-chull, has been asked to present himself for questioning Tuesday over alleged tax evasion and the creation of a slush fund, prosecutors said Sunday.

The Seoul Central Prosecutors’ Office sent the 53-year-old chaebol owner a summons Saturday, they said, adding that an arrest warrant will be requested following the questioning.

Reports have it that some of Lee’s funds are hidden in accounts opened under “borrowed names” at foreign banks, including UBS, Switzerland’s biggest lender.

Qquestioning will focus on allegations that Lee dodged 51 billion won in taxes, embezzled 60 billion won of the company’s funds and committed a breach of trust in a 35 billion won purchase of two properties in Japan, they said.

Sources said dozens of the food and entertainment group’s executives have purchased up to 300 famous works of leading contemporary artists, such as Andy Warhol and Jeff Koons since 2005.

Prosecutors want to determine whether Lee used the names of the company’s executives to buy the artwork with corporate funds to evade taxes.

Gallery Seomi head Hong Song-won was questioned twice last week over allegations that she had inflated the prices of artwork or forged papers at Lee’s request.

Lee is suspected of hiding the funds at banking accounts under hundreds of names “borrowed” from the group’s former and current executives.

Lee is suspected of creating the illegal fund by fabricating trades between the group and its overseas affiliates. CJ was spun off from Samsung in the 1990s.

If Lee is placed under arrested, he would join other chaebol owners already behind bars.

SK Group Chairman Chey Tae-won and Hanwha Group Chairman Kim Seung-youn were sentenced to four-year and three-year prison terms, respectively, earlier this year for embezzlement.

As a result of the CJ investigation, lawmakers are seeking to revise the Real Name Financial Services Law, which allows people to open banking accounts under borrowed names, if both sides agree to it.

Rep. Min Byung-doo of the main opposition Democratic Party submitted a bill earlier this month to revise the law.