New agency goes after SK’s Chey

The Financial Consumer Agency, a group representing the interests of financial consumers, said Monday it decided to indict SK Group Chairman Chey Tae-won, his mistress and Singapore-based Bergaya International.

The agency’s move follows the Financial Supervisory Service (FSS)’s investigation of Chey on suspicions that the violated the Foreign Exchange Transaction Act.

The FSS is currently investigating Chey’s mistress - identified as a 41-year-old divorcee surnamed Kim - and the SK subsidiary in Singapore on suspicions that they did not report a property transaction to the financial authority.

The watchdog told the JoongAng Ilbo last week that the mistress and an official in charge of overseas branches of the telecom and energy conglomerate were summoned for questioning about a real estate transaction that took place five years ago.

According to the FSS, the mistress, a U.S. citizen, purchased a 243 square-meter (2,615 square-foot) unit in the SK Apelbaum apartment complex in the posh neighborhood of Banpo in Seocho District, south of the Han River for 1.55 billion won ($1.28 million) in 2008.

She allegedly failed to report the purchase, as required for a foreign citizen.

Two years later she allegedly sold the apartment to Singapore-based Bergaya International for 2.4 billion won, making a healthy profit. Yet again, she allegedly failed to report the sale to the government.

Bergaya International is an overseas affiliate of SK Group, created just a month before the sale took place, raising suspicion that the company was created by Chey to help feather the nest of his mistress. The company allegedly failed to report the purchase to the government, the FSS said.

Under current law, non-residential foreigners including Koreans with foreign passports living abroad must report real estate purchases in Korea and file related documents to the Bank of Korea through commercial banks.

Separately from the FSS investigation, the consumer agency is planning to accuse Bergaya International of overpricing the apartment. On Chey, the agency will request a probe on suspicions of embezzlement, breach of trust and tax evasion.

“Whether Chey set up Bergaya in order to help Kim or not should be revealed,” said Cho Nam-hee, head of the agency. “Also, if there was any illegal inheritance in the process of the apartment purchase should be disclosed.”

The agency decided to take action because the FSS investigation is expected to take a long time.

“Our decision is based on a judgment that there should be more accurate and faster clarification on charges in order to reduce risks to SK shareholders and investors,” Cho said.

The FSS is also expanding its investigation of other transactions between Kim and the SK subsidiary or even third parties.

“It is part of a usual process to expand the investigation into other transactions,” said an FSS official.

BY SONG SU-HYUN, LEE TAE-KYUNG [song.suhyun@joongang.co.kr]