Suspicious funds prompt raid on Dongkuk Steel

Home > National > Social Affairs

print dictionary print

Suspicious funds prompt raid on Dongkuk Steel

테스트

Investigators leave the headquarters of Dongkuk Steel in central Seoul on Sunday with seized material. [NEWSIS]

Prosecutors on Sunday finished a 17-hour raid on Dongkuk Steel to look into embezzlement and tax evasion allegations, the latest in a series of investigations on the nation’s conglomerates that follow a pledge by the newly appointed prime minister to wipe out corruption.

The country’s first privately run steelmaker is suspected to have stashed away more than 10 billion won ($9 million) through trade deals with its foreign branches by overstating the price of raw materials and avoiding taxes.

The company, which celebrated its 60th anniversary last year, has operations in various countries, including the United States and Japan.

Approximately 60 prosecutors and investigators from the Seoul Central District Prosecutors’ Office were assigned to the raid, which began Saturday morning and ended the following day at 2:40 a.m.

Documents, account books and computer hard drives were confiscated from the steelmaker’s main office in Jung District, central Seoul, as well as the residence of the company’s CEO, Chang Sae-joo, in Jongno District, central Seoul.

Other affiliates were also subject to the raid, likely indicating that the investigation on Dongkuk Steel might affect its subsidiaries.

About 10 establishments were busted in total.

The prosecution said Sunday that company employees in charge of finance and accounting will be summoned for questioning soon. Those in higher-ranking positions, including Chang, will be called afterward.

Authorities are looking into whether Chang used the stolen funds to indulge his love for gambling and referred to an instance in the early 1990s in which the 62-year-old was investigated by the National Tax Service (NTS) over suspicions he was illegally betting with company money.

For eight months in 2011, the company was investigated by the NTS following suspicions of offshore tax dodging, and a massive slush fund was believed to have been made by exaggerating trade deals made with its overseas branches in the United States and Southeast Asia.

The inspection, led by the state-backed tax organization, wrapped up with it imposing a 2 billion won fine on the company, and the prosecution did not launch a deeper investigation.

Dongkuk Steel merged with its affiliate, Union Steel, earlier this year in an effort to stabilize its financial structure and find new profit-making channels. The company vowed to expand its overseas sales network with the merger.

Last year, Dongkuk Steel had sales of 6.6 trillion won, down 9.3 percent from the year before.

BY LEE SUNG-EUN [lee.sungeun@joongang.co.kr]





More in Social Affairs

Gov't tries to keep CSAT from being superspreader event

Chun Doo Hwan found guilty of defaming priest over Gwangju massacre account

Prosecutors implore Choo to reconsider suspension

Bird flu infects ducks on North Jeolla poultry farm

Regional leadership is at the heart of CNU president's approach

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now