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Conglomerates found to hold some 5.7 tln won in tax havens: data

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(Globalpost/GlobalPost)

SEOUL, May 26 (Yonhap) -- South Korea's large businesses are found to hold some 5.7 trillion won (US$5.1 billion) worth of assets through their corporate entities in tax haven regions, data showed Sunday.

According to the data by market researcher Chaebol.com, 24 local conglomerates were found to run corporate entities in nine tax havens, including the Cayman Islands, Panama, the Marshall Islands, Samoa and Cyprus.

The businesses cited in the data are private conglomerates holding 1 trillion won or larger in total assets. As of end-March, the number of their corporations in those regions stood at 125.

The entities held a combined 5.69 trillion won worth of assets in the regions that were designated as tax havens by the Organization for Economic Cooperation and Development.

They present much lower tax rates and less tax-related regulations, a condition that experts believe could lead to offshore tax evasion.

Hanwha Group was found to hold the largest 1.68 trillion won worth of assets in four such entities, followed by SK Group with 1.33 trillion won. SK Group, in particular, was found to operate the largest number of corporate entities at 63.

"Most of the offshore entities are related to the shipping business. ... They are all disclosed in our financial statements, and the nature of the money involved is not illegal," an SK official said.

Meanwhile, Samsung Group and LG Group hold 353.6 billion won and 334.2 billion won in assets in the cited regions, respectively, the data showed.

The data came after a group of independent journalists earlier disclosed names of business people and their families who have allegedly set up paper companies in tax haven countries apparently in order to hide money or avoid paying due taxes.

The list is based on data that the organization analyzed jointly with the International Consortium of Investigative Journalists (ICIJ).

Lee Soo-young, the owner of polysilicon-making giant OCI Co., and his wife were included on the list. OCI later confirmed that Lee had held $1 million in his personal bank account in the British Virgin Islands.

The National Tax Service (NTS) is poised to look into the matter.

"We will investigate by combining our own offshore tax evasion data that we have collected with the data disclosed by the ICIJ," an NTS official said on condition of anonymity.

"Currently, we are in a reviewing mode," he said. "Our principle stance is that we will conduct fact-checking and if a suspicion arises, we will take stern action such as a tax probe and tax collection."

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130525/conglomerates-found-hold-some-57-tln-won-tax-havens-data