The Korea Herald


Prosecutors take over Hyosung tax probe data from tax authority

By 박형기

Published : Oct. 7, 2013 - 20:14

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The Seoul prosecution on Monday obtained a local tax office's probe data on Hyosung Group for further investigation into allegations that the country's 26th
largest conglomerate evaded a massive amount of taxes, prosecutors said.

The Seoul Central District Prosecutors' Office has been looking into the case since the Seoul Regional Tax Office filed a charge last month against the group's chairman, Cho Suck-rai, 79, for allegedly leading the tax evasion scheme through various illegal methods.

"We took over tax probe materials on Hyosung from the Seoul Regional Tax Office with a search warrant issued by the court," Yoon Dae-jin, a senior prosecutor who leads the probe at the Seoul prosecution, told reporters.

The family-owned conglomerate had evaded corporate tax worth 1 trillion won (US$900 million) for the past 10 years since 1997 through an accounting fraud, according to the tax office that had conducted a special audit into the group for months beginning in May.

Chairman Cho is additionally accused of holding shares under borrowed names since the 1990s to evade transfer tax and income tax worth more than 100 billion won, according to prosecutors.

The tax office has already banned Cho and two others -- the chairman's key aide, whose identity has been withheld, and Vice Chairman Lee Sang-woon -- from leaving the country pending investigation results.

The group, with more than 11 trillion won in assets, has businesses mainly in the fields of energy and heavy industry. 

One of the chairman's nephews is a son-in-law of former President Lee Myung-bak. 

According to industry sources, two of the chairman's sons are competing to secure stakes in the group's flagship company Hyosung Corp., a textile and heavy machinery maker, in a bid to gain control of the group's management. (Yonhap News)