Hyundai Heavy group comes under tax probe

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Hyundai Heavy group comes under tax probe

Hyundai Heavy Industries, the nation’s No. 1 shipbuilder, is being investigated by tax auditors and the probe is likely to extend to its affiliates.

This is the first time since the Park Geun-hye administration was inaugurated that a top 10 conglomerate is being investigated as a whole by the tax office, although some individual companies have been probed.

According to the National Tax Service and the shipbuilder on Wednesday, auditors from the Seoul and Busan offices started going through records at the company’s headquarters in Ulsan.

On the surface, it is a regular tax audit that comes every five years. The last time Hyundai Heavy Industries was under the microscope of the tax agency was in 2010.

“Our understanding is that any company undergoes a regular tax audit every five years,” said an official at the shipbuilder.

But the fact that auditors from Seoul have joined those in Busan is considered unusual. The team from the Seoul office is known to specialize in large-scale tax evasion.

“In a preliminary investigation, we found several problems regarding Hyundai Heavy Industries’ overseas financial transactions,” said an NTS official. “Additionally, we have spotted substantial amounts of illegal inside trades amongst affiliates.”

The spread of audits to affiliates of the shipbuilder is considered inevitable since irregularities overseas and on intra-group trades have been detected.

Last year, the agency said it would try to refrain from conducting investigation against specific industries such as shipbuilding.

Hyundai Heavy Industries has 26 affiliates in shipbuilding, heavy machinery, and the plant and energy businesses.

According to the Fair Trade Commission, as of end of March, Hyundai Heavy Industries was the nation’s sixth-largest conglomerate with combined assets exceeding 58.4 trillion won.

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