Monday, November 24, 2014

sewol ferry sinking.jpg

Only one part of the hull of the capsized Sewol Ferry remains above water on April 17.
Only one part of the hull of the capsized Sewol Ferry remains above water on April 17.
23 April 2014

The Public Prosecutors’ Office announced an investigation into former Semo Group CEO Yoo Byeong-eon, de facto owner of Chonghaejin Marine Company that ran the sunken Sewol ferry. It is going to launch an investigation into the owner’s property concealment, tax evasion, lobbying, embezzlement, and misappropriation allegations, with the entire nation being grief-stricken since the sinking of the ferry.

However, the investigation is not only motivated by the country’s deep anguish, but by a series of suspicions and testimonies that have come to the surface. These days, the former CEO’s and his family’s past asset accumulation is raising a lot of doubts. The combined value of the assets of their 30 or so subsidiaries in Korea amounts to 560 billion won (US$538 million), while about half of it is liabilities. In addition, the stocks and real estate of the family members are considered to be worth approximately 240 billion won (US$230.9 million).

It is also said that the family members have much more properties abroad than what they reported to the National Tax Service and the auditing authorities. The Public Prosecutors’ Office suspects that they concealed most of their wealth and were engaged in offshore tax evasion during the asset building process. Testimony has also come out supporting such allegations.

The investigation authorities are planning to look into the entire range of such suspicions, and the financial and taxation authorities are looking into their alleged malpractice in foreign exchange transactions. For instance, the Financial Supervisory Service is looking into the possibility of negligent reporting during their purchase of overseas assets such as luxury apartments in New York and Los Angeles. Similar suspicions have been raised against Chonghaejin Marine Company as well.

The former CEO is one of the masterminds of the Odaeyang scandal that broke out back in 1987, in which 32 cult members committed collective suicide. At that time, he was under suspicion of leading the cult and accumulating huge personal debts. The prosecutors’ office failed to prove the former, and he was jailed for only four years. The scandal led to the bankruptcy of the Semo Group in 1997, and people became less and less interested in his family and company before the recent sinking of the Sewol ferry.

Categories: 

More Like This

Ordeal Continues
Thursday, 25 September 2014
CJ Group Chairman Lee Jae-hyun, who has been sentenced to three years in prison for embezzlement after appeal, misappropriation, and tax evasion worth 160 billion won (US$153 million), has appealed...
Financial Malpractice
Tuesday, 24 June 2014
In the middle of the recent chaos of financial accidents, KDB is suspected to be raising insolvent loans to STX. Accordingly, KDB executives will inevitably be held liable. KDB, however, claimed that...
Doomed to Plummet
Tuesday, 01 July 2014
The National Tax Service (NTS) launched a special tax investigation on Daewoo Shipbuilding and Marine Engineering (DSME). The last time it conducted a periodic tax investigation was four years ago,...
Investigation into Kakao
Wednesday, 14 August 2013
Kakao, a mobile messenger business, explained it is “in the process of confirming” the media coverage which reported 3 members of its board of directors were investigated by US inspection authorities...
Illegal Transactions
Friday, 11 October 2013
The Korea Customs Service (KCS) said on October 7 that it has uncovered illegal currency transactions worth of more than 1 trillion won (US$933.7 million) transacted through offshore tax havens. In...
Tycoon Malpractice
Thursday, 25 September 2014
The Financial Supervisory Service (FSS) has started an investigation into 20 wealthy individuals who are suspected of having carried in US$50 million from abroad for property donations. The...

Copyright 2013 BusinessKorea Co., Ltd.

301 Samdo Building, 12-1 Yeoido-dong, Yeongdeungpo-gu, Seoul, Korea 150-010 | Tel: +82-2-578-3220 | Fax: +82-2-578-3224 | Email: contact@businesskorea.co.kr

 

This month Business Korea is sponsored by: