Police raided the Seoul headquarters of the National Tax Service on Friday after a Samsung official said that he had reported to the office in 2011 secret bank accounts created for Samsung Group under borrowed names.
Nine investigators from the National Policy Agency’s special investigative team descended on the Seoul Regional Tax Office at around 9:30 a.m. looking for evidence to verify the official’s testimony.
Police suspect that these bank accounts, if confirmed to be existing, may be linked to Samsung’s slush fund scandal in 2007, exposed by a rare high-ranking whistleblower. The prosecution back then had formed a massive-scale investigative team to look into suspicions that the group created illicit funds using fraudulent bank accounts to bribe government officials.
In 2008, a special investigation counsel discovered that a total of 4.5 trillion won ($4.2 billion) were withdrawn from 1,199 bank accounts opened under borrowed names. The accounts allegedly had been used for the illegal transfer of wealth within the group’s founding Lee family -- from late founder Lee Byung-chul to his son and current group chairman, Lee Kun-hee.
In October, Rep. Park Yong-jin of the ruling Democratic Party of Korea raised fresh allegations during a parliamentary audit that Lee Kun-hee was allowed to cash out the slush funds without paying due taxes.
The NTS said last month it began reviewing the Samsung chief’s assets after the Finance Ministry said the accounts are subject to taxation regardless of the timeline.
According to the Act on Real Name Financial Transactions and Confidentiality, a withholding tax of 90 percent is to be imposed on interest and dividend income made on borrowed name assets.
Kim Sang-jo, Director of the Fair Trade Commission with a nickname “chaebol sniper” said that “the special counsel’s investigation into Samsung Group’s secret bank accounts was unsatisfactory,” when he attended the Special Committee on Budget and Accounts meeting on Nov. 9.
By Kim Da-sol (email@example.com