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Photo: National Tax Service (NTS) |
[Alpha Biz= Paul Lee] South Korea’s National Tax Service (NTS) said it uncovered large-scale tax evasion linked to unfair stock market practices, identifying 6.155 trillion won ($4.6 billion) in undeclared income following an eight-month investigation.
According to the NTS on March 5, the agency conducted an intensive tax probe from July last year through February targeting individuals and companies suspected of market manipulation, false disclosures and corporate fund embezzlement.
As a result, the tax authority collected 257.6 billion won in back taxes and referred 30 cases to prosecutors for criminal investigation.
One case involved a listed company that lured investors with a false plan to enter a renewable energy business in order to boost its stock price. After the shares surged, the company allegedly diverted tens of billions of won in corporate funds through paper companies to the controlling shareholder’s family.
The business plan later proved to be fictitious, causing the stock price to plunge to about one-third of its previous level before the company was eventually delisted. The controlling shareholder reportedly used the diverted funds for luxury spending, including housing deposits and golf club memberships. Authorities recovered 1.6 billion won in taxes and referred both the owner and the company to prosecutors.
The NTS said the investigation targeted a range of unfair market actors, including nine companies accused of misleading investors through false disclosures, eight firms linked to so-called corporate raiders seeking profits through mergers and acquisitions, and 10 controlling shareholders accused of privatizing corporate assets at the expense of minority investors.
The agency collected 94.6 billion won from companies involved in false disclosures, 41 billion won from corporate raider-related firms, and 122 billion won from controlling shareholders who misused company funds.
An NTS official said the probe was launched because unfair practices in the stock market undermine investor confidence and contribute to the so-called “Korea discount.” The official added that the agency will continue to pursue tax investigations against those who earn illicit profits while failing to pay their fair share of taxes.
알파경제 Paul Lee 특파원(hoondork1977@alphabiz.co.kr)
