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Doosan Audit Expands; Tax Evasion Found

Posted November. 16, 2005 08:23,   


The National Tax Service has extended its tax audit of Doosan Group from the company’s heavy industry subsidiary to the company as a whole.

This implies grave accusations based upon the investigation so far, and is drawing attention to future investigation results.

According to the authorities on tax affairs and related companies yesterday, it was reported that the National Tax Service has started compiling data concerning the group’s recent flow of funds in conjunction with its decision to investigate all the sectors of the Doosan Group.

The National Tax Service found evidence of tax evasion by the Doosan Group chief’s family, accomplished by establishing fake branches of three to four companies and forming secret funds amounting up to tens of billions of won, during its preliminary investigation.

It will also investigate if tax evasion took place when the company paid by proxy 29.3 billion won in interest, borrowed by the Doosan Group chief’s family when they took part in two of the Doosan Industrial Development Company’s capital increase programs.

The investigation will also look for signs of tax evasion by the Doosan Industrial Development Company during its seven years of window-dressing that amounted to 280 billion won.

Jae-Seong Hwang Hyo-Lim Son jsonhng@donga.com aryssong@donga.com