Prosecution has something to proveHyosung Group, the country’s 26th-largest conglomerate, is the latest to come under investigation from the prosecution on charges of wrongdoing and irregularities. The headquarters and affiliate offices of the group - whose main businesses are the chemical, textile and heavy industries - were raided by prosecutors on charges of tax evasion and embezzlement.
Group Chairman Cho Suck-rai and his three sons have been prohibited from leaving the country. His homes and those of other executives were raided. One of the chairman’s nephews is the son-in-law of former President Lee Myung-bak. The prosecution, which has raided and seized files from 10 offices and homes, will summon and question key executives this week. Hyosung is suspected of having cooked its books for a decade to mask massive losses from overseas operations since the financial crisis in 1997.
Through window-dressing accounting worth 1 trillion won ($933 million), it allegedly dodged hundreds of billions of won in corporate taxes. Having accumulated enough evidence, the National Tax Service asked the prosecution to uncover embezzlement and other wrongdoing by the Cho family. The prosecution plans to seek overseas transactions from the Financial Intelligence Unit to chase the hidden family fortune.
The Hyosung debacle is not new. The prosecution investigated the family’s amassing slush funds for more than a year since September 2009. Cho was questioned, but only two executives were charged without detention. The prosecution was criticized for its slap-on-the-wrist action on the tycoon who had a family connection with the former president. If the prosecution had done its work properly the last time, it would not have wasted public resources on the same company. The prosecution requires some self-examination to free itself from politics and investigate strictly based on the truth.
“Too big to fail” no longer exists. Courts lately have handed out heavy sentences even on corporate owners and executives. The renewed probe of Hyosung should focus on nothing but the truth. The prosecution must not consider any other connections or ramifications. It also should maintain neutrality so it does not draw any suspicion.
The investigation’s guidelines should concern only the illegalities of the family if the prosecution wants to shake off the stigma that it is weak against those in power and mighty against those who are not.