FSS to conduct special probe into Hyosung Group; family of chairman Cho Seok-rae borrowed money from Hyosung Capital, a financial arm of the group, under borrowed names

FSS to conduct special probe into Hyosung Group

2013.10.23 14:47:24

Hyosung Group, which was investigated by the Financial Supervisory Service (FSS) earlier this year, will be under another special probe on allegations that the family of chairman Cho Seok-rae borrowed money from Hyosung Capital, a financial arm of the group, under borrowed names. The FSS will launch a probe next month into Hyosung Capital on suspicions that chairman Cho Seok-rae’s family received several billion won loans from Hyosung Capital using borrowed names of corporate executives, according to a local news agency, Yonhap News Wednesday. Extending loans to the family of the owner did not infringe the relevant law, but FSS has apparently found some irregularities in Hyosung Capital`s loan approval procedure to the owners through its board and is considering restrictions against the group, according to the FSS’s probe on the financial unit of the group from April to May. Back then, the FSS did not investigate into whether the loans under the borrowed names were extended to the family, but this time, appointed a special prosecutor for the probe with rising suspicions. Meanwhile, Seoul Regional Tax Office filed a charge on September 30 against the conglomerate with the prosecution on allegations that the group raised slush funds by evading corporate tax through an accounting fraud worth one trillion won from 1997 and it did not pay taxes through management of borrowed-name assets.

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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