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Photo = National Tax Service |
[Alpha Biz= Kim Jisun] The Investigation Bureau 4 of the Seoul Regional Tax Office, which handles special tax probes, has launched an investigation into Korea Zinc, signaling intensifying pressure from authorities.
According to industry sources on May 6, the bureau visited Korea Zinc’s headquarters to secure accounting records and related materials as part of a non-routine (special) tax investigation. Investigation Bureau 4 is typically deployed on an ad hoc basis when authorities detect potential corporate misconduct such as tax evasion or embezzlement, rather than for regular audits.
Although the bureau operates under the Seoul Regional Tax Office, it is authorized to conduct cross-regional investigations and examine companies nationwide. Known for carrying out high-intensity probes and imposing substantial tax penalties, it is often referred to as the “grim reaper” of the business community.
The move comes as the Financial Supervisory Service is already reviewing Korea Zinc’s accounting practices. Authorities are examining whether the company failed to properly reflect losses related to a roughly 560 billion won investment in the One Asia Partners fund in its financial statements, and whether the valuation of its approximately 580 billion won acquisition of Igneo Holdings was overstated.
In addition, questions have been raised over advance payments of several tens of billions of won made to U.S. counterparts in connection with the construction of a smelter plant, which has yet to break ground.
Korea Zinc maintains that the ongoing probe is part of a routine tax audit conducted every five years, noting that its last regular audit took place in 2021. However, some observers argue that the involvement of Investigation Bureau 4 suggests a high likelihood of a special investigation.
A Korea Zinc official stated, “We will fully cooperate with the tax authorities’ investigation.”
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
