Hyosung chairman grilled over the group’s alleged tax evasion, embezzlement and creation of a slush fund

December 22, 2013 Leave a comment

2013-12-10 16:48

Hyosung chairman grilled over slush fund creation

Nam Hyun-woo

Hyosung Group Chairman Cho Suk-rae appeared before the prosecution Tuesday to be questioned over the group’s alleged tax evasion, embezzlement and creation of a slush fund. The 78-year-old tycoon appeared at the Seoul Central District Prosecutors’ Office at around 10 a.m. “I will earnestly answer prosecutors’ questions,” Cho told reporters before entering the office. He refused to make any further comments.
Cho had been hospitalized at Seoul National University Hospital since Dec. 5 due to cardiac arrhythmia and other health problems.
Prosecutors questioned him about whether he neglected to follow required procedures such as board meetings before making decisions and declaring tax statements properly to the authorities.
Cho and his sons have been implicated in tax dodging, breach of trust and embezzlement.
The energy and textile group came under investigation after the Seoul Regional Tax Service accused Cho and other group executives in September of evading hundreds of billions of won in corporate taxes through a 100 billion-won accounting fraud since 1997 when the company suffered a massive loss amid the 1997-1998 Asian financial crisis.
Also, the group is suspected of having reaped illegal gains through suspicious share trading using borrowed funds under names of its overseas corporations and paper firms in order to get rid of risk.
Last month, Hyosung Group President Cho Hyun-joon, the eldest son of the chairman, was summoned and questioned over the alleged creation of a slush fund worth hundreds of billions of won and being involved in other irregularities.
The Cho family is additionally accused of holding shares under borrowed names since the 1990s in a bid to dodge gift and income taxes.
The prosecution had also grilled senior Cho’s second son, Hyun-moon, former vice president of the group early last month. The prosecution is expected to expand its investigation to his third son, Hyun-sang, the vice president of Hyosung.

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