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

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.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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