Fri, Jul 19, 2013 - Page 6 News List

S Korean tycoon faces charges of embezzlement

AFP, SEOUL

The head of South Korean food and entertainment giant CJ Group was charged yesterday with embezzlement and tax evasion, prosecutors said, as Seoul seeks to rein in family-controlled business groups.

CJ Group chairman Lee Jae-Hyun, 53, allegedly stashed away undeclared assets worth about 96 billion won (US$86 million) and was evading taxes worth 54.6 billion won since 2004.

“This is a case where a business tycoon illicitly pocketed funds diverted from listed companies and evaded tax,” prosecutor Park Jeong-shik told journalists.

Lee created about 10 shell companies in foreign countries including Singapore and Hong Kong to avoid tax, he said.

Three other former and current executives of the group were also charged as accomplices. CJ said the accused accepted the results and had apologized.

Lee is a nephew of Samsung Group chairman Lee Kun-hee. CJ, which started out as a food company, has been expanding aggressively to other businesses such as entertainment and retail.

The indictment comes as South Korean President Park Geun-hye’s government is seeking to prevent all-embracing conglomerates from extending into small retail businesses.

Combined revenue of the group amounted to 26.8 trillion won last year. Business tycoons in South Korea have often got off lightly for wrongdoing, with courts recognizing their contribution to the economy as a reason for leniency.

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