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Prosecutors arrest CJ China head suspected as `slush fund manager’

Prosecutors arrest CJ China head suspected as `slush fund manager’

Posted June. 08, 2013 07:21,   


Investigating suspected slush funds and tax evasion by CJ Group, the Special Investigation Department 2 at the Seoul Central District Public Prosecutors’ Office said on Friday that it arrested without warrant an executive (vice president level), identified by Shin, head of CJ China and CJ Global Holdings, and sought arrest warrant for him.

Shin is believed to be a "core safe keeper," who is fully aware of the size and current situations of CJ Chairman Lee Jae-hyun’s slush funds in Korea and overseas and the scale of assets kept in borrowed names. With Shin’s arrest without warrant, watchers say that prosecutors will summon Chairman Lee sooner than expected.

A prosecution source said, “While investigating Shin on Thursday afternoon after summoning him, we arrested Shin without warrant late in the evening.” Prosecutors sought an arrest warrant for Shin on tax evasion charges under the act imposing heavier punishment for specific crimes. Shin, who had been mostly working in Hong Kong, recently visited Korea without knowing about the ongoing prosecutorial probe into CJ Group, and was subjected to a travel ban.

Prosecutors judge that while comprehensively supervising CJ Group’s finance team from 2004 to 2007, Shin was involved in management of the company’s slush funds and assets in borrowed names. He is also believed to have played a critical role in managing its overseas slush funds while serving as the head of CJ China. Shin is reportedly a key figure involved in amassment of slush funds by Chairman Lee through the company’s overseas affiliates, as he spearheaded the establishment of CJ Group’s multiple special purpose companies in Hong King.

Prosecutors reportedly have found key evidence that will prove charges against Shin. This is evidenced by a prosecution source’s remarks that “We arrested Shin without warrant, because he was deemed complying with requirements for the Criminal Procedure Act.” Prosecutors are allowed to arrest without warrant when there is a reason to believe that a suspect committed a crime severe enough to face a jail term or imprisonment of three years or longer, or a suspect could seek to destroy evidence or run away.

Earlier, prosecutors summoned and questioned two officials from CJ’s Japanese headquarters, who were suspected as routes for Lee’s slush funds. They also requested authorities in Hong Kong and Singapore for information on bank accounts in borrowed names.