Gov’t probes transfer of stock to son of exec

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Gov’t probes transfer of stock to son of exec

The Seoul Western District Prosecutors’ Office raided the headquarters of Taekwang Group in Seoul yesterday on the suspicion that Lee Hyeon-jun, the president of the group, allegedly transferred shares of his company to his 16-year-old son by issuing new stocks of its affiliated companies at a lower price.

Prosecutors said they confiscated internal documents and a PC hard drive from the office to determine whether the group intentionally lowered the price of its shares for the transfer to Lee’s son.

Seoul Investment, one of the minority shareholders of Taekwang, has raised questions during an interview with reporters that Taekwang might have committed an illegal donation to the son.

Seoul Investment said it obtained documents from the Taekwang Group’s affiliated companies and found that Lee issued new stocks of Tbroad Holdings, Co., Ltd., TRM and Heungkuk Securities at a low price, and that he then gave up his right to buy the stocks, transferring the right of sale to his son. As a result, the son allegedly received a half stake of the group.

“According to our analysis, Lee reorganized the governance structure of the [Taekwang] group by selling the group’s shares to his son at a huge discount,” said Park Yun-bae, president of Seoul Investment. “The group sold the shares at less than one-tenth of the price allowed by inheritance laws.”

Prosecutors said they will conduct an intensive and thorough investigation of the transfer.

Taekwang denies any wrongdoing.

“The matter has already been scrutinized by law,” the group said.

By Jeong Seon-eon, Kim Hee-jin []
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