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Gov't looks into chaebol stock transfers

Posted August. 14, 2000 14:13,   


The Office of National Tax Administration, which is investigating stock transfers at Hyundai, Samsung, LG, SK and other major chaebol groups, reportedly is chasing bank accounts of the chaebols¡¯ largest shareholders, as they are suspected of irregular transfers of stocks.

It is expected that ONTA`s investigation of chaebol families¡¯ bank accounts will be used as means to squeeze chaebol groups, along with the investigation by the Fair Trade Commission of the four leading chaebols for unfair internal transactions.

The ONTA announced on August 13 that its investigation of chaebol group`s stock transfers since last April has been prolonged due to close tracking of bank accounts.

As it failed to trace the stock transfer of chaebol groups during the past five years, the ONTA is conducting a broad investigation on them, and a regular corporate tax audit of their major subsidiaries also is under way.

The ONTA officials said that the succession of corporate ownership from founders to their sons has been carried forward in these groups and that tax evasion is very likely in this process.

In particular, the ONTA`s investigation is focused on tax evasion by using various financial products such as convertible bonds and bonds with warrants and whether they have gone through proper evaluation processes for unlisted stocks as regulated by the tax law.

As for stock transfers by persons in special relationships, the tax office also is investigating the sources of funds and whether stocks had been purchased with corporate funds.

"The investigation on tax evasion by chaebol owners is yet to be finished, but we will collect the balance immediately after they are found to have evaded tax in the process of transferring property to their heirs," the ONTA said.