Panama to help Korea in tax evasion probe

By Jung Min-ho

Roh Jae-heon

Ruben Arosemena

Panama will cooperate with Korea in investigating Koreans allegedly involved in an international tax evasion scandal, Panamanian Ambassador to Korea Ruben Arosemena said Friday.

During an interview with Yonhap News Agency, he said, “We will be ready to vigorously collaborate if the Korean government requires any assistance in its investigation of tax evasion.”

Arosemena promised to share all information the Korean government may need about the “Panama Papers,” a collection of leaked documents containing detailed information about more than 214,000 offshore entities connected to people in various countries.

The list reportedly includes 195 Koreans, including Roh Jae-heon, the eldest son of former President Roh Tae-woo. He was found to have set up three shell companies in the British Virgin Islands in 2012.

After the revelations, Roh admitted establishing the companies but denied any wrongdoing.

“The shell companies have nothing to do with tax evasion,” he said in a press release. “The companies were established for my business plans in China but remained unused after the plans fell through.”

However, many suspect that Roh might have sought to stash some of the wealth his father illegally collected during his presidency from 1988 to 1993.

The former president was convicted of treason, mutiny and corruption in 1996. The court ordered him to pay more than 260 billion won ($225 million) in restitution for other crimes. He has paid off about 90 percent of the fine, but many suspect his son still hides some of his slush fund.

Setting up a shell company itself is not illegal according to Korean law. However, they are often used for illegal activities such as dodging taxes or hiding illicit wealth.

The Financial Supervisory Service said it will start an investigation of Koreans whose names are revealed in the Panama Papers as soon as it obtains the necessary documents from the Panamanian government.

Arosemena said that his government has begun its own investigation into Mossack Fonseca, a law firm in Panama that specializes in setting up offshore companies.

“They (Mossack Fonseca) should defend themselves in the probe. Any penalties or fines against the company will depend on how severe the cases are,” he said.

The global scandal, which involves 12 former and current presidents, monarchs and prime ministers, has already forced Icelandic Prime Minister Sigmundur David Gunnlaugsson to resign. More are expected to follow in his footsteps as many countries are looking into the leaks.

Newstapa, an independent online news outlet that first confirmed Koreans’ involvement in the leak, said it has identified some 15,000 files containing the search keyword “Korea.” From them, it has found the names of 195 presumed suspects who have addresses in Korea. It plans to report on them one by one after confirming their identities.