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CJ chairman arrested over slush fund allegations

The chairman of food and entertainment conglomerate CJ Group was put behind bars Monday on charges of creating secret funds and evading taxes.

Lee Jay-hyun was taken to the Seoul Detention Center on the southern outskirts of Seoul immediately after the Seoul Central District Court issued an arrest warrant for allegedly dodging some 70 billion won ($61.4 million) in taxes by stashing secret funds and misappropriating 100 billion won in company money.

The country's 10th richest man is also accused of inflicting financial losses worth 35 billion won to the group by fraudulently purchasing two buildings in Tokyo.

"(Lee's) crimes have been ascertained, and there is a reasonable concern that the suspect might attempt to destroy evidence or flee," Judge Kim Woo-soo said in issuing the warrant after a hearing on his habeas corpus claims.

At the hearing, lawyers for the 53-year-old tycoon argued that he has actively cooperated with the prosecution's probe and that there is no fear that he may destroy evidence or flee.

Prosecutors said they will indict Lee sometime mid-July after a renewal of a 10-day imprisonment period. A court-issued warrant guarantees up to 20 days in imprisonment period.

During questioning by prosecutors last week, Lee admitted to having instructed group executives to create slush funds, but claimed the funds were not for personal use, according to prosecution sources.

The prosecution office requested an arrest warrant for the businessman on Wednesday, saying his detention is necessary given the seriousness of the charges against him. He was charged with embezzlement, breach of trust and tax evasion. (Yonhap News)