The Korea Herald

피터빈트

Body names 7 Koreans with tax haven accounts

Hanjin Shipping, Hanwha, Daewoo International, SK may face probe

By Park Hyung-ki

Published : May 27, 2013 - 15:46

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The Korea Center for Investigative Journalism unveiled on Monday its second batch of seven Koreans, connected to four notable conglomerates in the country, holding offshore accounts via paper companies set up in tax havens.

The seven were found to be incumbent and former executives of chaebol, and are expected to be scrutinized by the National Tax Service for any signs of tax evasion or avoidance through those ghost companies.

They are: Choi Eun-young, chairwoman and CEO of Hanjin Shipping; Cho Yong-min, former CEO of Hanjin Shipping; Hwang Yong-deug, CEO of Hanwha Station Development; Cho Min-ho, former CEO of SK Securities, and his wife; Lee Deog-kyu, former director of Daewoo International; and Yoo Choon-sik, former president of Daewoo Motor Poland.

The KCIJ, also known as Newstapa, said that Hanjin Shipping chairwoman Choi and Cho created a paper company in the British Virgin Islands in 2008. Choi owns a 90 percent stake in the tax haven firm, while the rest is held by Cho, who resigned as the company’s CEO in 2011.

Hanjin Shipping admitted via a statement that they created the paper company on their own but liquidated it in 2011 after seeing that it was an unnecessary asset.

CEO Hwang of Hanwha Station Development, a joint venture between Hanwha Group and state-run KORAIL that builds railroad stations, was found to have purchased apartments in Hawaii and sold them to Hanwha Japan through an account established in the Cook Islands in 1996.



Hanwha Group told Newstapa that those transactions were purely for Hwang’s personal reasons and that they had nothing to do with the group, while Hwang claimed he has no knowledge of making such transactions via a paper company.

Hanwha Group later retracted its previous statement and told the independent news organization that Hanwha Japan created the paper company.

Cho Min-ho, former CEO of SK Securities, created a paper company in the Virgin Islands in 1996, and his wife, surnamed Kim, became a shareholder in 2003, the center said.

Lee Deog-kyu, a former executive of Daewoo International, an energy and trading subsidiary of steel giant POSCO, created an account via a ghost company in the Virgin Islands in 2005.

Lee told Newstapa that his position at the company allowed him to make an independent decision to set up a paper company on behalf of Daewoo International. However, the trading giant denied Lee’s claims, saying that the company has no connection to the establishment of the tax haven account.

Yoo Choon-sik, a former president of Daewoo Motor Poland, also created an account with seven others, who were not disclosed, in the Virgin Islands in 2007. He told the nonprofit news organization that he deposited $60,000 into the account for venture investments.

Last week, the center, in collaboration with the International Consortium of Investigative Journalists, disclosed its first batch of tax haven account-holders who were executives and their family members affiliated with OCI, Korean Air and Hyosung Group.

It said 245 Koreans operated tax haven paper companies.


By Park Hyong-ki
(hkp@heraldcorp.com)