The prosecution began summoning Hyosung Group executives on Monday as they seek to determine the scale of the conglomerate’s alleged tax evasion.
The Seoul Central District Prosecutors’ Office is also continuing to analyze data obtained by raiding the group’s office and those provided by the National Tax Service.
In addition, the investigators are reported to have requested information regarding financial transactions conducted by Hyosung Group chairman Cho Suck-rai and his family from the Financial Intelligence Unit.
Information regarding transactions carried out by Hyosung Group executives thought to be involved in the scam, including a senior vice president identified by the surname Koh, has also been requested. Koh is thought to have been in charge of managing the Cho family’s funds.
Hyosung Group, the country’s 26th largest conglomerate, is thought to have tampered with accounts to evade corporate taxes of several hundred billion won since the Asian Financial Crisis in the late 1990s.
According to a recent tax audit, the group hid losses sustained from an overseas project in 1997 by reducing affiliates profits in financial reports.
The group is also thought to have taken out large loans through its overseas operations and lending the funds to paper companies set up abroad.
The loaned cash was then written off as irrecoverable debt, and used to fund the group’s stock transactions in Korea.
The prosecution suspects that the profits generated from the transactions were funneled to Hyosung Group chairman and his family, who are also considered likely to be summoned for questioning.
The Chos are also suspected of evading a significant amount of gift taxes by managing assets valued at more than 100 billion won ($93 million) under borrowed names since the 1990s.
By Choi He-suk (firstname.lastname@example.org