PM Designate Admits Tax Evasion

The national assembly interrogated on 26th the acting prime minister, Chang Dae-whan, during confirmation hearing for next prime minister. The lawmakers were keen on the question over his possible tax evasion in relation to the speculative investment and gift and his aquisition of stocks with the fund from board director loan while he was in the president office of Maeil economic newspaper company. Along with these questions suspicion over his children`s fake residential registration, his wife`s under-reporting of income and health insurance fee underpayment and his capability of carrying out national affairs were scrutinized.

Reps. Hong Jun-pyo and Ahn Gyeong-ryul from Grand National Party claimed that Chang drew his loan from its newspaper company as a director and paid the loan with the borrowed money from a bank amounting to 2.39 billion collateralized by the company`s deposits, which constitute 12 case violation of current law including negligence .

Hong said that the stamp on the minutes from the BOD meeting to be held for the attachment of pledge concerning that director`s loan is different from the stamp on the pledge attachment contract and directors` stamps are made of wood suggest that the minutes might have been cooked.

Ahn also claimed that 12 real estates such as ones in Seoul, Chejudo, Cholla province escaped the registration tax, inheritance and gift tax.

Ahn Taek-su from the GNP argued that Chang`s wife specified in the application form for 1.5 billion won loan that Chang`s Annual income is 421million won and his total income is 151million won on March 19, however the data he provided in the appointment consent form said his Annual income is merely 17million won , income tax is 250 thousand won , which are tantamount to obstruction of national affairs.

Rep. Uhm Ho-sung of the GNP grilled Mr. Chang saying" The founder of the newspaper company asked 80 percent of his company`s asset should be distributed to society and remaining 20 percent should be doled out to employees in his will. Despite the will, 28.2 percent of the company`s stake is in the hand of your mother-in-law. How did you afford the stock acquisition?"

Lawmakers also asked him to provide clear answers about how he acquired the doctor degree within one year after his master`s degree and whether he omitted knowingly any asset during his property registration process, whether there have been shady relations with the current government.

Young-Chan Yoon Seung-Heon Lee yyc11@donga.com ddr@donga.com