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Prosecution to extend detention period for CJ head

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(Globalpost/GlobalPost)

SEOUL, July 9 (Yonhap) -- Prosecutors said Tuesday that they will extend the imprisonment period for the head of the food and entertainment conglomerate CJ Group to further investigate him over alleged tax evasion and embezzlement.

Chairman Lee Jay-hyun was locked up at the Seoul Detention Center on the southern outskirts of Seoul on July 1, shortly after a district court approved the prosecution's request for an arrest warrant for the country's 10th richest man.

As Lee's first 10-day imprisonment period expires on Wednesday, prosecutors said they will ask a local court to grant the extension.

In South Korea, prosecutors can detain a suspect with a court-issued warrant for up to 10 days pending trial, and can extend the period for another 10 days if they need more time for interrogation.

The 53-year-old tycoon is under suspicion of dodging some 70 billion won (US$61.4 million) in taxes through stashing secret funds and misappropriating 100 billion won of corporate money by hiding the funds both at home and abroad through various illegal methods.

Lee is further accused of siphoning off some 60 billion won from CJ CheilJedang, a flagship food affiliate, by inflating prices of raw materials between 1998 and 2005, they said.

As to the group's claim that its chairman suffers from various illnesses such as Charcot Marie Tooth disease, chronic renal failure, hyperlipidemia, and high blood pressure, prosecutors declined to comment, saying that it is a personal matter.

"(Lee) was summoned from his cell for questioning every day," a prosecution official close to the investigation said, adding that the chairman is cooperating with the investigation and is eating well.

Prosecutors said they have quizzed Lee to uncover the details of where the illegal money was spent as part of their efforts to determine the exact size of the secret funds.

The questioning also focused on suspicions that the chairman hid massive assets in overseas bank accounts opened under the names of acquaintances to fraudulently purchase shares of his own companies to increase his stake in CJ Group, they said.

Lee, a grandson of Lee Byung-chull, the founder of South Korea's top conglomerate Samsung Group, was the first tycoon to be arrested on corruption charges since President Park Geun-hye took office in February.

CJ Group, which covers sectors ranging from pharmaceuticals to entertainment, was part of Samsung Group until 1997. Chairman Lee is also a nephew of Lee Kun-hee, chairman of Samsung Electronics Co. and South Korea's richest man.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130709/prosecution-extend-detention-period-cj-head