The Korea Herald

지나쌤

OCI admits accounts, Korean Air denies link

By Chung Joo-won

Published : May 22, 2013 - 20:41

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OCI chairman Lee Soo-young, former Korean Air vice chairman’s wife Lee Young-hak and DSDL chairman Cho Wook-rae are included on the list of 245 Koreans suspected of creating bogus companies in overseas tax havens.

Disclosing the list at a news conference on Wednesday, Kim Yong-jin, head of the Korea Center for Investigative Journalism, said Lee of OCI admitted to the KCIJ about managing such accounts through paper companies.

Lee told the KCIJ that the fund merely amounts to some hundreds of thousands of dollars, according to Kim.

But Korean Air stressed that it has nothing to do with the suspicions surrounding Lee Young-hak. It said the former vice chairman worked at the airliner from 1992 to 1997 and left the company, adding that whatever he did after retirement is not related to Korean Air.

According to the KCIJ, the three people managed financial accounts in the British Virgin Islands.

The area, along with the Cook Islands, is a favorite tax haven of Korean companies and individuals to allegedly set up paper companies.

A tax haven refers to a country or region that offers foreign individuals and businesses little or no tax liability. Despite financial authorities’ close monitoring, Korean firms have secured massive funds under disguise as “overseas investment funds,” the Bank of Korea stated in a recent April report for policymakers.

Some of the other best-known tax havens ― such as Dominica, the Bahamas, Belize, Singapore, Hong Kong, Seychelles, Mauritius, Panama, Nevis and the Cayman Islands ― are located in the Caribbean, Europe and the Pacific.

Out of the 245 Korean companies and individuals on the list, 159 established paper companies in the British Virgin Islands and the Cook Islands, the KCIJ said. Seventy people established nominal companies in the British Virgin Islands alone, the organization claimed.

By Chung Joo-won (joowonc@heraldcorp.com)