More shell companies abroad exposed by site

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More shell companies abroad exposed by site

The nonprofit online news organization Newstapa yesterday released a second list of names of big business executives accused of setting up shell companies in tax havens to dodge taxes.

The names included Choi Eun-young, chairwoman of Hanjin Shipping Holdings, and seven others who are former or sitting executives at three conglomerates: Hanwha, Daewoo International (which is now a subsidiary of Posco) and SK.

Like the first list released by Newstapa last week, most of the people on the list set up shell companies in times of difficulty, including the Asian financial crisis of the late 1990s and the global financial crisis that began in late 2008.

According to Newstapa, Hanjin Shipping’s Choi set up a shell company in the Virgin Islands on Oct. 2, 2008 under the name Wide Gate Group.

Former Hanjin Shipping’s chief executive officer, Cho Yong-min, is registered as director of the company. Choi owns 90 percent of the 50,000 shares that were issued, and Cho owns the rest.

Hwang Yong-deug, president of Hanwha Station Development, set up a shell company dubbed Five Star Aku Trust in the Cook Islands on Feb. 19, 1996.

Hanwha Station Development is a Hanwha Group affiliate that specializes in the development and management of privately operated train stations such as Seoul Station.

Hwang is accused of profiting from real estate transactions in Hawaii through the shell company. According to the news organization, after the shell company was set up, Five Star Aku Limited, which is related to the shell company, bought an apartment in Uraku Tower, Kapiolani Boulevard, Honolulu, on March 1, 1996. On Aug. 18, 1997, the shell company bought another apartment in the same building and sold it to Hanwha Group’s Japan office in June 2002.

The president of Hanwha is suspected of making nearly $2.4 million from the real estate transactions.

Newstapa said Hwang has denied any knowledge of the sales and is avoiding any recent contact with it. Hanwha Group at first claimed that the transaction was Hwang’s personal issue. But now the conglomerate is arguing that the shell company is actually established by its Japan branch, according to Newstapa.

Cho Min-ho, former SK Securities and SK Chemical vice chairman, set up a shell company Crossbrook in the Virgin Islands on Jan. 15, 1996, Newstapa said.

On paper the company issued one share which Cho’s wife Kim Young-hye purchased on Oct. 20, 2003.

Lee Deog-kyu, a former executive of Daewoo International, set up Contour Pacific Limited, July 18, 2005 in the Virgin Islands.

Lee is the only director and shareholder of the company. Newstapa stated Lee denied that he set up the company on his own while Daewoo International has denied its involvement.

Former Daewoo Motor Poland President Yoo Choon-sik is one of eight shareholders who own a shell company Sun Wave Management Limited, which was established in the Virgin Islands on April 18, 2007, Newstapa said. According to Newtapa, Yoo claims to have invested $600,000 in what he called a start-up company.

By Lee Ho-jeong []
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