CJ Group Chairman Lee Jay-hyun has been banned from leaving the country in a widening investigation into his massive slush fund, prosecutors said Thursday
May 24, 2013 Leave a comment
2013-05-23 17:15
CJ chairman banned from leaving nation
By Kim Jae-won
CJ Group Chairman Lee Jay-hyun has been banned from leaving the country in a widening investigation into his massive slush fund, prosecutors said Thursday.
Besides the initially-cited 7 billion won, prosecutors suspect that the size of Lee’s slush funds is far larger and gave a significant portion of it to his children, they said.
Sources in the Seoul Central District Prosecutors’ Office say that in 2006 Lee allegedly transferred a combined 50 billion won to his two children — 25 billion won each — in cash without paying gift taxes, raising suspicions that it was part of the slush fund. The group also is suspected of helping CJ America and CJ Indonesia expand their businesses by buying their products at inflated prices.CJ America is the U.S. headquarters of CJ Corp., and has served numerous roles in the development of the company’s core capabilities in the North American region for more than 30 years.
Lee’s excessively concentrated power in the group is one of the reasons enabling him to create the slush fund. Lee has been under fire for holding multiple positions on the boards of the group’s subsidiaries.
He has membership on the boards of eight affiliates — the group’s holding company CJ Corp., its main food company CJ CheilJedang, movie theater chain CJ CGV, logistics company CJ Korea Express, entertainment subsidiary CJ E&M, cable home shopping channel CJ O Shopping, information technology service company CJ Systems and home delivery affiliate CJ GLS.
Chairman Lee adds to the list of troubled chaebol leaders such as Hanwha Group Chairman Kim Seung-youn and SK Group Chairman Chey Tae-won.
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