Shinwon chief under tax evasion probe
Prosecutors have launched an investigation into alleged tax evasion by Shinwon Group Chairman Park Seong-cheol.
Investigators from the Seoul Central Prosecutors’ Office raided the headquarters of the apparel company and Park’s home in central Seoul, Wednesday, and seized account books and other related documents.
After reviewing the seized materials, prosecutors plan to summon Park for questioning, the office said.
The probe follows a complaint by the National Tax Service (NTS), which received information that Park purchased the company’s shares using the names of his family members to regain managerial control and avoid paying gift and income taxes.
In 1999, when the group fell into a debt workout program, Park gave up all his shares. Since 2003, when the firm graduated from the program, he has held the position of CEO despite not holding any stake in Shinwon under his own name.
This was possible because Park’s wife, Song Ki-jeong, set up an advertising company, T&M Communications, in 2001 and the company has the largest stake in Shinwon. Song owns 26.6 percent of T&M and Park’s three sons also have 1 percent each.
T&M is a de-facto paper company without any ongoing businesses. It only became known that Park’s three sons were appointed as directors in 2011.
Park allegedly purchased Shinwon’s shares through T&M to evade taxes.
After a special audit, the NTS imposed 19 billion won in additional tax on Song and several Shinwon executives for tax evasion.
Prosecutors are also probing other allegations that Park embezzled 10 billion won in company funds and had debt worth 25 billion won written off by falsely reporting his assets to the courts for personal bankruptcy.
