An independent investigative journalism group in South Korea made public on Wednesday a list of top Korean businessmen suspected of creating offshore shell companies to evade taxes.
The news was announced at a press conference by the Korea Center for Investigative Journalism (KCIJ), a non-profit organization run by former journalists, according to Yonhap News. The group has thus far disclosed the names of three heads of family-owned conglomerates that have allegedly set up bogus companies in the British Virgin Islands and the Cook Islands, both tax havens, to stash money or avoid paying taxes in South Korea.
The three names are Lee Soo-young, the owner of the polysilicon-making giant OCI Co. (KRX:010060), and his wife; Lee Young-hak, wife of the former vice president of Korean Air Lines (KRX:003490); and the family that owns the 25th largest Korean conglomerate, Hyosung Group (KRX:004800). Of the three, Lee of the OCI Co. admitted to the KCIJ that his company managed financial accounts through such paper companies. He said the funds amounted to hundreds of thousands of dollars, according to Kim Yong-jin, the chief director of KCIJ, at the press conference, Yonhap News reported.
"The other two were always having a 'meeting' every time we tried to reach them by phone," he said.
The KCIJ’s list currently consists of 245 Korean businessmen, and the group expects the number to go up as the project progresses. The investigation was a joint effort between the KCIJ and the International Consortium of Investigative Journalists (ICIJ). Of the 245 companies under investigation, the group claims 159 set up bogus companies with Korean addresses, and the other 86 set up ones with addresses in Hong Kong or Singapore. Most of them have at least one shell company, but some have up to five. Some accounts are hard to track down as they were created under false names, the KCIJ said.
"We're first releasing the names of those that have considerable economic clout so that the disclosure will be in accord with the public interest," Kim said.
The research is based on an internal database consisting of information on 130,000 clients and more than 122,000 shell companies obtained from two agencies that set up paper companies by proxy.
The KCIJ said it will announce another list of tax evaders' names at the next press conference, which is schedule for next Monday, according to Yonhap News.