The Korea Herald


Lotte Tour chief fined W62b

By 남숙현

Published : July 15, 2011 - 20:12

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The National Tax Service has slapped a 62 billion won ($58.6 million) fine on Lotte Tour chief executive Kim Ki-Byung for tax evasion and referred the case to the prosecution.

Lotte Tour is independent of Lotte Group, but Kim is married to Lotte Group chairman Shin Kyuk-ho’s younger sister and Dongwha Duty Free CEO Shin Jung-hee.
Kim Ki-byung Kim Ki-byung

According to NTS sources, Kim was fined for illicit measures taken to avoid the gift tax when transferring ownership of stocks valued at 73.5 billion won to his two sons ― Kim Han-sung and Kim Han-joon ― in 2008. The two younger Kims now hold executive posts within Lotte Tour and Dongwha Duty Free.

The development comes three years after the National Tax Service retracted fines issued to two Lotte Tour executives following an investigation in 2008, as a result of a new investigation the tax office was prompted into by the Board of Audit and Inspection of Korea’s findings that the retraction was inappropriate.

At the time, the tax office fined two executives of the company 23 billion won for their part in transferring 73.5 billion won worth of stocks to Kim’s two sons without paying gift taxes.

The stocks had been held under the name of an executive of a subsidiary of Kim’s company until 1998. In 2004, the ownership of the stock was again changed, on paper, to an executive of his company.

The stocks again changed hands in 2008, this time to Kim’s sons, without paying taxes using falsified documents that named his sons as the owners of the 73.5 billion won worth of stocks.

Despite the findings, the tax office retracted its decision based on Lotte Tour’s claims that as the illegal transactions took place in 1991, the 15-year statute of limitations on taxation had run out.

By Choi He-suk  (