Investigation into Major Stockholders` Stock Inheritance

The Office of National Tax Service (NTS) will investigate whether prominent corporate major stockholders` have reported their donation tax accordingly.

“We`ve decided to prevent the rich from donating their wealth to their heirs without proper taxes,” says an NTS official on 15th January.

For this measure, the NTS plans to compare information from Korea Stock Exchange (KSE) and Board of KOSDAQ to investigate any tax evasion by the stockholders` donations.

Also the NTS plans to analyze each mandatory corporate stock fluctuation report due on end of March, together with corporate tax reports.

By this, corporate which have donated its stocks extensively to major stockholders` heir in last October when the stock price was at minimum will be prime investigation candidates.

According to NTS and KSE, Yun Sae-young, President of Taeyoung Corporation has donated 1,057,123shares of all his stock to his son Yun Seok-min, CEO of SBSi.

In the same month, Jung Sang-Young, Honorary president of Kumkang Korea Chemicals Corporation also has donated 380,000 shares, 180,000 shares, 90,000 shares to President Jung Mong-jin, Director Jung Mong-ik of Kumkang Korea Chemicals Corporation and Vice President Jung Mong-ryul of Kumkang General Construction Co. accordingly.

“When inheriting wealth from relatives, inheritance donations must be reported to the NTS within three months. If a tax evasion is found during tax report investigation, 20% of the total donation tax will be included as an additional tax,” says an NTS official.

Jin-Hup Song jinhup@donga.com