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CJ chairman detained over slush fund allegations

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(Globalpost/GlobalPost)

SEOUL, July 1 (Yonhap) -- The chairman of food and entertainment conglomerate CJ Group was formally detained Monday on charges of creating secret funds and evading taxes, court officials said.

Lee Jay-hyun was put under detention immediately after the Seoul Central District Court approved the prosecution's request for an arrest warrant for the country's 10th richest man.

Lee is charged with dodging some 70 billion won (US$61.4 million) in taxes by stashing secret funds and misappropriating 100 billion won in company money. He is also accused of inflicting financial losses worth 35 billion won to the group by fraudulently purchasing two buildings in Tokyo.

"There is a possibility of evidence being destroyed, and the suspect is likely to flee," Judge Kim Woo-soo said of the reasons for the court's decision.

At a court hearing held earlier in the day, lawyers for the 53-year-old tycoon argued that he has actively cooperated with the prosecution's probe and that there is no fear that he may destroy evidence or flee.

During questioning by prosecutors last week, Lee admitted to having instructed group executives to create slush funds but claimed the funds were not for personal use, according to prosecution sources.

The Seoul Central District Prosecutors' Office probing the case requested an arrest warrant for the businessman on Wednesday, saying his detention is necessary given the seriousness of the charges against him. He was charged with embezzlement, breach of trust and tax evasion.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130701/cj-chairman-detained-over-slush-fund-allegations