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Hanwha Life raided for alleged offshore tax evasion

Tax authorities on Thursday raided the headquarters of Hanwha Life Insurance to look into whether the company played a crucial role in the alleged tax dodging of Hanwha Group as its flagship financial unit.

The National Tax Service secured a variety of documents and computer hard disks by dispatching some 100 inspectors to Hanwha Life headquarters at the 63 Building in Yeouido, Seoul.

Its investigative action comes days after a group of independent journalists revealed names of high-profile businesspeople, suspected of having run paper companies in offshore tax havens in an alleged bid to evade taxes.

An executive at a business unit of Hanwha Group was included on the blacklist.

Conglomerate sector info provider Chaebul.com earlier said that Hanwha Group holds the largest assets among Korea’s conglomerates in offshore tax havens, such as the Cayman Islands and British Virgin Islands in the Caribbean Sea, via its overseas entities.

Aside from the Hanwha insurance subsidiary, the NTS recently launched an investigation into the parent Hanwha Group on suspicion that it has been involved in offshore tax evasion and the operation of slush funds, according to industry sources.

In a similar vein, financial authorities launched a full-fledged probe into alleged tax dodgers over their foreign currency trading.

Amid feasibility that some Koreans exploited their offshore tax haven accounts, officials at the Financial Supervisory Service said they are scrutinizing records of foreign exchange transactions by 12 high-profile businesspeople in the conglomerate sector.

A key issue in the state financial regulator’s inspection is whether they have broken the law on foreign currency trading.

The law stipulates that a Korean national should notify foreign exchange-specialized banks of any direct investment, purchase of property or financial transactions made outside the country prior to their dealing.

The FSS is set to look into financial statements from local foreign exchange banks, which show detailed transactions made by Korean nationals who hold accounts in tax havens, with the results of the inspection to be released in several months.

The names of 12 businessmen came as an independent online-based media organization here started unveiling their names last week, as those who have set up bogus companies in popular tax havens.

The revelations made by the Korea Center for Investigative Journalists have prompted local authorities to kick off their own probes into possible tax evasion and concealment of secretive money.

The list has drawn public attention as it includes some incumbent and former heads and executives of family-owned business groups.

The list involves Choi Eun-young, the chairwoman of shipping giant Hanjin Shipping and Lee Soo-young, the chairman of polysilicon maker OCI.

By Kim Yon-se (kys@heraldcorp.com)
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