Hanjin Shipping Chairwoman Choi Eun-young and former Hanjin Shipping Holdings CEO Cho Yong-min have operated a paper company in an offshore tax haven, as well as four other high-profile figures from affiliates of other conglomerates, an online news outlet said Monday.
Their names were disclosed by the outlet, Newstapa, which is working with the U.S.-based International Consortium of Investigative Journalists (ICIJ), in a second announcement of people on a list of 245 Koreans who it claims are operating paper companies in offshore tax havens. The first announcement was made last Wednesday.
Five other figures on the list were Hwang Yong-deug, president of Hanwha Station Development; Lee Deog-kyu, former director of Daewoo International; Yoo Choon-sik, former chief of Daewoo Motor’s local affiliate in Poland; and former SK Securities Vice President Cho Min-ho and his wife Kim Young-hye.
Following the two announcements, the National Tax Service (NTS) is expected to speed up its investigation into offshore tax evasion allegations against conglomerates.
According to the news outlet, Choi and Cho of Hanjin established Wide Gate Group in the British Virgin Islands in October 2008. “Choi is registered as a shareholder and Cho as a director. Of the 50,000 shares of Wide Gate Group, Choi holds 90 percent of them and Cho, 10 percent,” Newstapa chief Kim Yong-jin said.
As to the revelation, Hanjin Shipping said that Choi and Cho jointly set up the paper company for personal purposes unrelated to Hanjin. “But they did not need the firm, so they sold all the shares in November 2011,” the company said in a press release.
Hwang established Five Star Aku Trust in the Cook Islands in February 1996 when he was working at Hanwha’s Tokyo office.
“When we contacted Hwang, he claimed he knew nothing about the paper company, and has avoided contact since. Hanwha Group said it was Hwang’s own business and the group had nothing to do with it. But today (Monday) the group changed its claim and said Five Star Aku Trust is a paper company set up by Hanwha Japan, the group’s affiliate,” Kim said.
Lee set up Contour Pacific in the British Virgin Islands in July 2005. “Lee told us that establishing a paper company requires more than a director’s decision. But Daewoo International claimed the paper firm has nothing to do with it,” he said.
Yoo established Sun Wave Management there in April 2007. “Yoo was one of eight shareholders of the company. He claimed he invested $60,000 in it. Sun Wave Management’s largest shareholder, CayDa Capital Group, was also a paper company set up on the British Virgin Islands.”
Cho of SK opened Crossbrook in the British Virgin Islands in January 1996. “The firm issued one share, and Cho’s wife obtained it from an unidentified bearer in October 2003,” Newstapa said.
Although the news outlet said it would not cooperate with the government, the NTS said it would look into whether the mentioned conglomerates and figures committed any illegality such as tax evasion through the paper companies.
The first list included Lee Soo-young, chairman of OCI; Lee’s wife; the wife of former Korean Air Vice Chairman Cho Joong-geon; DSDL Chairman Cho Wook-rae; and Cho’s eldest son.
Newstapa said it would continue disclosing more people on the list after a confirmation process, with the third announcement due Thursday. It is rumored that the third list includes names of politicians.
