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Hyosung chief grilled on tax evasion

Hyosung chief grilled on tax evasion

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Published : 2013-12-10 10:24
Updated : 2013-12-10 18:35

Hyosung Group chairman Cho Suck-rai enters the Seoul Central District Prosecutors’ Office on Tuesday. (Kim Myung-sub/The Korea Herald)

Prosecutors grilled Hyosung Group chairman Cho Suck-rai on Tuesday on his role in alleged tax evasion, accounting fraud and embezzlement involving Korea’s 26th largest conglomerate.

Cho presented himself to the Seoul Central District Prosecutors’ Office in the morning. He told reporters that he would answer questions with sincerity.

The interrogation focused on whether he recognized, directed or overlooked company misdeeds.

Hyosung is under suspicion of evading billions of won in corporate taxes through a decade-long fabricating of accounts in order to make up the losses caused during the 1997 financial crisis.

Cho is also accused of holding shares under borrowed names since the 1990s, totaling about 100 billion won ($95 million), without paying transfer taxes.

The prosecution is looking into the possibility that he transferred currency illegally or is hiding assets abroad through offshore paper companies.

Cho is suspected of using Hyosung Capital, the financial unit of the conglomerate, as a private safe, loaning more than 1 trillion won to his family and Hyosung executives.

In total, about 400 billion won was found to have been borrowed by Cho’s family members.

Cho has been hospitalized at Seoul National University Hospital since last Thursday, citing cardiac arrhythmia. He stayed in the hospital in late October for about two weeks due to high blood pressure and an irregular heartbeat.

Hyosung has been under a probe over tax evasion and embezzlement since October. The National Tax Service discovered the irregularities through a special tax audit in the middle of this year and reported its findings to the prosecution in September.

Prosecutors have already questioned Cho’s two sons ― Cho Hyun-joon and Cho Hyun-moon ― along with Hyosung vice chairman Lee Sang-woon late last month.

The prosecution will settle on the penalties and punitive measures to be taken after deciding whether to re-question the chairman or summon his youngest son, Cho Hyun-sang. 

By Lee Hyun-jeong

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