Son of Former Korean President Obtained Secret Offshore Company Amid Family’s Tax Evasion Scandal
By Yoojung LeeJune 4, 2013, 4:30 pm
‘Offshore Leaks’ records show oldest son of South Korea’s former president Chun Doo-hwan had British Virgin Islands company.
The eldest son of South Korea’s former President Chun Doo-hwan obtained an offshore company in the Caribbean in 2004 amid a tax evasion probe into his younger brother’s alleged involvement with their father’s bribery-fed slush fund.
Prosecutors are aggressively seeking the ex-president’s hidden assets in the face of an approaching statute of limitations deadline for his unpaid fine of 167.2 billion won ($149.3 million).
Chun Jae-kook, the oldest child of the former military strongman, became a director and shareholder of a secret company in the British Virgin Islands with the help of a law firm and an offshore services provider in Singapore, according to records obtained by the International Consortium of Investigative Journalists (ICIJ) and reviewed by the Korea Center for Investigative Journalism (KCIJ), also known as Newstapa.
Chun Jae-kook, CEO of the country’s major publishing house, Sigongsa, did not respond directly to requests for comment for this story.
He released a statement saying that his offshore company had nothing to do with his father and that it was not created for evading taxes or concealing assets. He explained that his involvement in offshore came about as he moved the money he had for studying and living in the United States to Singapore when he returned to South Korea in 1989.
“I have never taken assets out of the country, and am currently holding no assets abroad,” he said.
Dictator’s Ill-gotten Wealth
Chun Jae-kook’s 2004 acquisition of the offshore company came months after his younger brother, Chun Jae-yong, was arrested on charges of evading taxes on 16.7 billion won, money that the younger Chun said he inherited from his maternal grandfather.
A court ruled that at least 7.3 billion won of the money came from his father’s slush fund.
Chun Doo-hwan ruled the country from 1980 to 1988 after seizing power through a military coup in 1979. He was convicted in 1997 of amassing a huge slush fund of hundreds of billions of won in bribes funneled to him by businessmen during his presidency.
The former president was also convicted of charges stemming from the 1979 mutiny and a bloody crackdown in the southern city of Gwangju in May 1980, in which hundreds of pro-democracy protesters were massacred by police.
Chun Doo-hwan was initially sentenced to death in 1996 for his role in the Gwangju slaughter, but was later pardoned.
Chun Jae-kook, the eldest son, has faced suspicions that he, like his younger brother, may have been associated with the management of his father’s slush fund, but no evidence has been found linking him to the father’s concealed assets.
Unpaid fines
In 1997, the former president was ordered to repay 220 billion won of the ill-gotten gains he was found to have amassed while in office.
He has paid only a quarter of the total. He still owes 167.2 billion won in outstanding fines.
Chun Doo-hwan told a court hearing in 2003 that he had only 290,000 won in savings, claiming that he was unable to pay the rest of the fine.
His children’s assets, meanwhile, are estimated to be some 200 billion won, and the father has come under fierce public criticism for a lavish lifestyle that includes trips to prestigious golf resorts. He also donated more than 1,000 million won to the Korea Military Academy, his alma mater.
Prosecutors have come under increasing public pressure to track down Chun Doo-hwan’s wealth before the statute of limitations in his case expires in October. They recently launched a special task force to step up their investigation. The deadline in the case can be extended if prosecutors uncover traces of the hidden assets.
Prosecutor General Chae Dong-wook encouraged the newly-established team to use “every possible means” to locate the ex-president’s illegally accumulated fortune.
