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Published : 2013-08-02 11:09
Updated : 2013-08-02 11:23

Prosecutors on Friday sought an arrest warrant for an embattled former head of the national tax agency on charges of accepting massive bribes from food and entertainment conglomerate CJ Group.

Jeon Goon-pyo, 59, is accused of taking US$300,000 in U.S. bills and high-end watches from CJ Group officials in exchange for favors during a tax audit into the conglomerate in July 2006, shortly after he was named the commissioner of the National Tax Service (NTS), prosecutors said.

Prosecutors detained Jeon shortly after midnight following about 14 hours of intensive questioning, judging the case as important and that there is considerable reason to suspect that Jeon committed the alleged crime.

The former NTS commissioner, during questioning at the Seoul Central District Prosecutors' Office, admitted to accepting the kickbacks from CJ Group while denying they were in exchange for any favors, prosecutors said.

A Seoul court is set to hold a hearing on Saturday to decide whether to issue the warrant for the former tax chief, court officials said.

A decision on the warrant will be made later on Saturday or early Sunday, they added.

The prosecution probe into CJ's alleged illegal lobbying for tax breaks has been picking up pace recently after its chairman Lee Jay-hyun was indicted for embezzlement and offshore tax evasion charges in a separate corruption case last month.

During the audit into CJ Group in 2006, tax authorities obtained evidence that the group and its chairman allegedly dodged some 356 billion won (US$319 million) in corporate and income taxes. However, the NTS neither collected nor levied any fines on the family-run conglomerate, according to prosecution sources.

The prosecution office suspects that CJ Group officials illegally lobbied the former top tax officials so that the conglomerate could reduce its tax burden or even avoid paying the massive amount of taxes altogether.

CJ Group officials alleged that they gave the money and expensive designer watches to Heo Byung-ik, the NTS deputy commissioner at the time, asking him to relay them to Jeon.

Heo, who was arrested pending trial on Saturday, admitted to taking the kickbacks but claimed that he had handed the money over to Jeon, according to prosecutors.

Suspicions have also risen that Jeon, who is banned from traveling while the probe is ongoing, received the watches at a Seoul hotel as an inauguration gift from Chairman Lee.

It is not the first time that the prosecution has sought an arrest warrant for Jeon over graft allegations.

In 2011, Jeon was accused of receiving a high-priced painting from the agency's No. 2 official in exchange for securing the top post before he was officially given the job. (Yonhap News)

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