Report Reveals South Korea's Elite Stash Billions in Tax Havens

An investigation by a group of independent journalists have discovered that a number of high-profile figures in South Korea, including the ex-president's son and major corporate moguls, are allegedly evading taxes through a paper-company scheme in offshore tax havens, such as the British Virgin Islands in the Caribbean and the Cook Islands in the Pacific.

South Korean independent journalism site NewsTapa together with the International Consortium of Investigative Journalists (ICIJunveiled 245 names of South Koreans who allegedly have founded paper companies in the islands to avoid paying taxes. Among those listed are executives of Samsung Group and a former executive at conglomerate Daewoo Corp and the total amount of wealth hidden amounts to [ko] 870 trillion won (770 billion US dollars).

The latest report [ko], published on June 3, 2013 disclosed that the eldest son of former South Korean President Chun Doo-hwan is also suspected of tax evasion. Chun, who served as president from 1980 to 1988, is notorious for suppressing democracy and press freedom for over a decade and directing the Gwang-ju massacre. Chun famously said [ko] in 2003, when asked to pay massive fines associated with the multiple murder charges and bribery allegations he was facing, that all he had was 290,000 Korean won (about 260 US dollars) and a Korean Jindo dog.

Web users have flooded online venues calling for tough actions against those suspected of tax evasion and praising the investigative journalists who made this revelation possible.

Journalist @welovehani highlighted and summarised [ko] a part of the NewsTapa report:

@welovehani: 뉴스타파 “전두환 아들 전재국씨가 2004년 7월 28일 버진아일랜드에 페이퍼컴퍼니 설립. 이 때는 전두환 차남 전재용씨에 대한 검찰의 비자금 수사가 이뤄진 시기와 일치”

@welovehani: NewsTapa reported “Chun Doo-hwan's son Chun Jae-guk founded a paper company in the British Virgin Island on July 28, 2004. It is when the prosecutor's office investigation on the slush funds of Chun's younger son, Chun Jae-young was underway.”

Influential Twitter user @mettayoon‘s tweet [ko] has been retweeted more than 100 times:

@mettayoon: 뉴스타파 최승호 앵커의 클로징. “부디 정부가 전두환씨의 모든 재산을 찾아 추징하고 이땅에 정의가 살아있음을 보여주길 바랍니다.”

@mettayoon: This was NewsTapa anchor's closing comment: “The government needs to prove that justice is still alive in this country by unearthing all of Chun Doo-hwan's [hidden] property and charging taxes on them.

Net users have filed an online petition [ko] on Daum Agora, calling for severe punishment for those suspected of illegal tax evasion. More than 1,000 people have signed as of June 3, 2013:

재벌들은 세금을 안내도 버젓히 목에 힘주고 돌아다니는 이상한 나라! 버진아일랜드에 재벌들이 숨긴 870조를 국민의 손으로 환수합시다 […] prairie 서명합니다. 떳떳하게 세금내는 사람만 바보가 되는 현실 바꿔 봅시다.

This is ridiculous that chaebol conglomerates, even after refusing to pay taxes, still roam free, holding their heads up high. We the people need to take back [the total of] 870 trillion Korean Won (770 billion US dollars) worth of chaebols hidden in the Virgin Islands. […] [net user ID] prairie commented below: I signed this petition. We need to change this situation where people who pay their taxes as they should are being treated as idiots.

Lawyer Lee Jae-hwa (@jhohmylaw) [ko] wrote that authorities should not delay looking into the revelations:

@jhohmylaw: 뉴스타파가 조세피난처에 페이퍼컴퍼니를 설립한 명단을 공개했다. 조세포탈범행의 결정적 수사단서다. 검찰과 국세청은 더 이상 머뭇거리지 말고 뉴스타파가 공개한 대상기업과 임원의 조세포탈 및 국외재산도피죄에 대한 수사에 착수해야 한다.

@jhohmylaw: NewsTapa unveiled a list of names who built paper companies in a tax haven. This can be critical evidence in an investigation. The prosecutor's office and the National Tax Service should no longer be procrastinating and forge ahead investigating those companies and corporate executives suspected of tax evasion and check whether if the “offshore tax evasion charge” can be applied to them.

Twitter user @sinbi2010 slammed [ko] corporations for stashing their millions while ordinary people feel the economic pinch:

@sinbi2010: 뉴스타파 기사를 보면 조세피난처 버진아일랜드에 돈을 숨긴 약 245명의 870조 중 많은 부분이 IMF 금융위기 때 빼돌렸다. 국민은 금을 모아 나라를 살리고자 했으며 노동자들은 명퇴 조기퇴직 구조조정을 감수 해야 했다.재벌들은 돈을 꼼치고 있었다.

@sinbi2010: According to NewsTapa's article on the 245 people who hid 870 trillion won (770 billion US dollars) in a tax haven, they stashed that money in the haven during the IMF Crisis [note: the term refers to the 1997-1998 Asian Financial Crisis during which South Korea was both rescued and supervised by the International Monetary Fund] While ordinary citizens sold their gold to help the country in crisis and laborers were forced to leave early and became victims of mass layoffs, corporations have hoarded and stashed the money.

Lavish praise has been heaped on NewsTapa, or Korea Center for Investigative Journalism, which is a non-profit, independent investigative journalism site founded by journalists dismissed from network TV for taking anti-government stances during the Lee Myung-bak's administration from 2008 to 2013.

NewsTapa Editor-in-Chief Kim Yong-jin (@kbsmuckrakertweeted [ko] after uploading its video report on YouTube:

@kbsmuckraker:뉴스타파 조세피난처 탐사리포트 유튜브에도 올렸습니다..기자 27년하면서 비밀기록 많이 봤지만 이런건 처음입니다. 많이 공유해 주시길.

@kbsmuckraker: I've uploaded NewsTapa's investigative reports on tax havens on YouTube. Even for me, who has seen numerous confidential documents while working as a journalist for 27 years, this is something I've never seen. Please share it with many others.

* NewsTapa Content contents are CC BY-NC-ND 2.0 protected. English subtitles are not yet unavailable.

Twitter user @ariul202 criticized the mainstream media [ko] for keeping silent while this revelation was made by a young, small news site:

@ariul202:비영리 독립언론 “뉴스타파”가 연일 조세피난처에 페이퍼컴퍼니를 운영한 파렴치한들 을 발표하건 만, 메이져 언론사란 작자들과, 국세청은 뭐하는가?[…]

@ariul202: While a non-profit, independent journalism site, “NewsTapa”, releases names of those bastards who run a paper company in a tax haven, where were the mainstream media and the National Tax Service? […]


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