- POSTED: 14 Dec 2013 00:38
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South Korean prosecutors are seeking an arrest warrant for the head of one the country's large conglomerates over allegations he created slush funds and helped his company evade $94 million in taxes, reports said Friday.
SEOUL: South Korean prosecutors are seeking an arrest warrant for the head of one the country's large conglomerates over allegations he created slush funds and helped his company evade $94 million in taxes, reports said Friday.
Cho Suk-rai, head of the Hyosung Corporation, which has interests ranging from chemicals to heavy machinery, is facing multiple charges including embezzlement, tax fraud and breach of trust, prosecutors said, according to the Kyodo news agency.
"Senior prosecutors at the Seoul Central District Prosecutors' Office have decided to seek the warrant for (Cho) after careful deliberation," a prosecutor described as close to the investigation told the news agency.
Cho was summoned by prosecutors twice this week to answer the allegations, Kyodo added.
According to the report, Hyosung -- the country's 26th largest business group -- is accused of cooking its books for much of the past ten years to cover up losses that were incurred during the 1997-98 financial crisis.
Prosecutors alleged that the conglomerate held shares under borrowed names since the 1990s to evade transfer and income taxes worth more than 100 billion won ($94 million).
They also accuse the company of using shell companies in tax havens to make illegal profits by trading shares on the local stock market with secret funds from the offshore companies.
Hyosung is one of the many powerful family-run conglomerates in Korea known as "chaebols".
Giant chaebols powered the country's post-war economic miracle and spearheaded its booming export business.
But they are also seen as slowly suffocating the small and medium-size firms best able to nurture innovators and create jobs.
Kyodo said a district court in Seoul will hold a hearing on Tuesday to decide whether the arrest warrant should be issued for Cho.