FSS investigating cash brought in by chairmen

The Financial Supervisory Service (FSS) has opened an investigation into questionable cash deposited into the bank accounts of approximately 20 owners of family-run conglomerates, including Lotte Group CEO Shin Kyuk-ho and energy company OCI Chairman Lee Soo-young.

The chairmen brought in a total of $50 million from abroad that they did not report to the authority, the FSS said.

When Koreans bring in more than $20,000 from other countries, including from property sales, they must report the source of the money to their banks.

The FSS said yesterday it has received documents concerning 20 chairmen who deposited more than $1 million in cash into their personal bank accounts between 2011 and this year. It added that it could not determine where the money came from and has begun an inspection.

If the FSS finds any evidence that the chairmen created slush funds or evaded taxes, it will prosecute them.

According to the FSS, Lotte Group’s Shin had remittances totaling $9 million over that period.

The rest of the owners had questionable funds of $1 million to $1.5 million each.

“[We] did the necessary reports when bringing in foreign currency, and the total of the money was used to pay capital gains tax,” Lotte Group said in an official statement.

Shin founded the investment company Lovest AG in Japan in the 1970s and invested in Yeosu Petrochemical (formerly the holding company of Lotte Chemical), which merged with Lotte Corporation.

The group explained that it brought in the $9 million in cash to pay for taxes incurred by gains from selling some of its shares in Lotte Corporation. OCI said the money paid to Lee was the salary he earned as the chair of the board of OCI Enterprises, a subsidiary based in the United States.

BY SONG SU-HYUN [ssh@joongang.co.kr]