245 names have been revealed; more to come over the next several weeks
By Song Kyung-hwa and Lee Wan, staff reporters On May 22, the website News Tapa, also called the Korea Center for Investigative Journalism, unveiled a list of major South Korean business figures who founded “paper companies” in the British Virgin Islands, a notorious tax haven.
The names included former Korea Employers’ Federation chairman and current OCI (formerly DC Chemical) chairman Lee Soo-young and his wife, OCI Museum director Kim Kyung-ja, as well as Lee Young-hak, who is the wife of former Korean Air deputy chairman Cho Jung-gun, and DSDL (formerly Dongseong Development) chairman Cho Wook-rae and oldest son Hyeon-gang. Cho is the younger brother of Cho Seok-rae, chairman of the Hyosung Group.
The National Tax Service now plans to use the list and information to conduct an investigation into possible systematic tax evasion.
News Tapa held a press conference at the Seoul Press Center in central Seoul on May 22 to announce the first findings of its investigation in the “Tax Haven Project,” a joint effort with the International Consortium of Investigative Journalists (ICIJ). The site said it had found 245 South Koreans on a list of customers given on internal documents for Portcullis TrustNet (PTN) and Commonwealth Trust (CTL), agencies that broker the establishment of paper companies in tax havens. After finishing identity confirmation procedures for around twenty of them, it gave an initial three listings.
News Tapa is an investigative journalism site that was founded in 2011 by current president Kim Yong-jin, formerly of KBS, and other journalists who were dismissed from their jobs during the Lee Myung-bak administration (2008-2013).
According to the documents News Tapa revealed, Lee Soo-young and his wife set up the paper company Richmond Forest Management Limited in the Virgin Islands on April 28, 2008. Cho Jung-gun and his wife founded Kapiolani Holdings Inc. on June 19, 2007, while Cho Wook-rae and son set up Quick Progress Investment Ltd on March 15, 2007.
Cho Jung-geon, Lee Young-hak, and Cho Wook-rae were all found to have conducted transactions on high-price apartment properties in Hawaii through their companies.
“It’s very rare for internal information at PTN or CTL to be directly linked with bank accounts,” explained Kim Yong-jin. “But there are times when you can spot the movements of assets, with references to bank accounts in business emails and information about beneficiaries, in the case of trust management.”
“The experts at the National Tax Service will investigating the tax evasion,” Kim added.
He also said News Tapa would not be providing data to government agencies because of a promise to ICIJ.
News Tapa plans to reveal more names two or three times a week over the next several weeks.
“The ones we announced this time were mainly chaebol families,” Kim said. “Next time, I think we’ll be including a lot of executives at those businesses.
"Some of them are chaebol group names that people will have heard of."
The NTS said it planned to analyze the site’s list of South Koreans using tax havens and investigate the possibility of tax evasion.