Wednesday, March 27, 2019
Civic Group Accuses NXC and Its Chairman Kim Jung-ju of Evading Tax
Tax Evasion Allegations Against NXC, Its Chairman
Civic Group Accuses NXC and Its Chairman Kim Jung-ju of Evading Tax
  • By Michael Herh
  • February 13, 2019, 12:40
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A civic organization has filed a petition with the prosecution to investigate Kim Jung-ju, chairman of NXC Corp., the holding company of Nexon Group, for evading taxes.

A civic organization has accused Kim Jung-ju, chairman of NXC Corp., the holding company of Nexon Group, of evading taxes.

Specwatch Korea, which monitors speculative capital, said in a press conference at the Seoul Central Prosecutor's Office on Feb. 12 that it would file a petition with the prosecution to investigate Kim and NXC for tax evasion.

"Kim evaded 158.4 billion won in corporate tax by falsifying the number of employees at the main office of NXC Corp., which the company relocated to Jeju Island without fulfilling its obligation to move into its building in Pangyo, in order to get a maximum reduction of the tax imposed on the capital gains from the sales of Nexon Japan stocks," the civic group claimed.

"NXC dodged 297.3 billion in taxes through fraudulent transactions with a paper company set up abroad. It invested about 100 million shares in kind in the paper company between 2009 and 2015, a period during which NXC was eligible for tax favors thanks to the relocation of its headquarters to Jeju Island. It generated profits through the fraudulent transactions without any change in its stake ownership and evaded taxes on them. It stashed the funds overseas,” it said.

In addition, the group filed complaints against NXC’s affiliate Neople for tax evasion and unfair trading, and additionally charged NXC with accounting book fabrication and a violation of the Fair Trade Act.

An official of NXC Corp., however, flatly said the allegations against Kim and NXC are groundless.

Meanwhile, Kim was indicted in 2005 on charges of lending 425 million won (bribing) to Jin Kyung-joon, a former senior prosecutor, to allow him to purchase Nexon stocks, but was acquitted of the bribing charge in May last year.