By Jung Min-ho
Two children of AmorePacific founder Suh Seong-hwan were named in the Panama Papers for establishing off-shore companies in a tax haven.
According to a report by Newstapa, Suh Young-bai, the founder’s eldest son and chairman of Pacific Engineering and Construction, set up a shell company named Watermark Capital in the British Virgin Islands in 2004.
The report comes as the Financial Supervisory Service (FSS) is investigating Koreans allegedly involved in the international tax evasion scandal, which was triggered by leaked documents containing detailed information about more than 214,000 offshore entities around the world.
Suh was found to be the sole stockholder of Watermark Capital at the Akara Building on Tortola, an address used by thousands of offshore companies from different countries.
According to the report, Singapore-based ING Asia Private Bank helped him set up the shell company and hide his identity. In 2013, the bank allegedly replaced his name with Alliance Corporate Services Limited, another bogus company it created, as the owner of Watermark Capital.
Suh Mi-sook, the youngest daughter of the AmorePacific founder, was also found to set up a shell company, Weise International LTD, in the British Virgin Islands in 2006.
The company was co-owned by her three sons, including the youngest one who was only eight years old at the time, according to internal documents.
When asked why she set up the company, her lawyer told Newstapa that the account was created only to manage her money in Canada. According to her lawyer, she sent 3.7 billion won ($3.3 million) to her account in Canada in 2006 because she planned to move there, but returned the money in 2008 after she cancelled the plan.
The lawyer, however, did not explain why her three sons were registered as stockholders of the company.
Creating a shell company itself is not illegal according to Korean law. However, it becomes a problem when they are used for illegal activities such as dodging taxes or hiding illicit wealth.
A total of 195 Koreans are so far known to be named in the Panama Papers, including Roh Jae-heon, the eldest son of former President Roh Tae-woo.
The papers contain 11.5 million confidential documents about more than 214,000 offshore companies that were compiled by Panamanian law firm Mossack Fosneca.