Samsung chairman Lee Kun-hee suspected of evading $7.5M in taxes by South Korean police

Posted:
in General Discussion edited February 8
Lee Kun-hee, the chairman of South Korean electronics giant Samsung, has been identified by police as a suspect in a tax evasion case, after authorities discovered evidence that 8.2 billion won ($7.5 million) in taxes was avoided by concealing funds in bank accounts opened under the names of other company executives.




Chairman Lee and another Samsung executive "managed funds in 260 bank accounts under names of 72 executives," the Korean National Police Agency alleges in a statement to Reuters, with the two individuals "suspected of evading taxes worth 8.2 billion won." The agency also advised it plans to send the case to prosecutors in the near future.

The tax evasion investigation stems from a 2011 probe into a late payment of 130 billion won ($119.6 million) in tax. The accounts in question were discovered as part of the examination by the authorities into alleged improper payments for renovations to the Lee family residence, and were found to hold funds in the region of 400 billion won ($368 million).

Despite the high value of the cash hoard, only 8.2 billion won falls within the statute of limitations, police claim.

The ailing 76-year-old chairman has yet to be questioned by police on the matter due to his physical condition. Lee has taken a back seat from the company after suffering from a heart attack in 2014, allowing son Lee Jae-yong to take control as vice chairman and head of the company, while he resides in Seoul's Samsung Medical Center.

In his tenure at the top, the younger Lee has himself fallen into legal trouble, sentenced last August to five years in jail for bribery, embezzlement, perjury, and of hiding assets abroad. The allegations were a national scandal that led to the downfall of former Korean President Park Geun-hye, with Lee claimed to have paid bribes in exchange for favors that helped Samsung as well as giving Lee more power within the organization.

On Monday, Lee Jae-yong was released by an appeals court after being given a shorter sentence, which itself was suspended. Now Free, Lee Jae-yong is expected to retake control of the company.

This is not the first time Lee Kun-hee has been accused of tax evasion. In 2008, he received a suspended three-year prison sentence for embezzlement and tax evasion, using the same tactic of hiding cash in accounts held by Samsung employees.

The following year, the chairman was given a pardon by then-President Lee Myung-bak.

The pardoning of both men demonstrates the considerable influence of the family-owned conglomerate and other firms - known as "chaebols" - wield in South Korea. Considering Samsung's size and importance to the country, it is probable that elder Lee could receive another pardon if he is convicted over the latest set of allegations.

Comments

  • Reply 1 of 12
    The Samsung Family crime drama is good reality TV.
    anton zuykovpeterhartlkruppmacseekerlolliverwatto_cobrajony0
  • Reply 2 of 12
    Rayz2016Rayz2016 Posts: 3,504member
    They should just build them their own prison cell with a revolving door. 
    lolliverwatto_cobra
  • Reply 3 of 12
    Meanwhile, Apple is paying their taxes lol. 
    Sgt Storms(trooper)watto_cobrabadmonk
  • Reply 4 of 12
    slurpyslurpy Posts: 4,983member
    Disgusting. Even more disgusting how many Americans shill for this company, celebrate it, promote it, simply to spite Apple. 
    lkruppdewmeoneof52lolliverwatto_cobrajony0
  • Reply 5 of 12
    eightzeroeightzero Posts: 1,944member
    Police in Korea assess taxes?
    watto_cobra
  • Reply 6 of 12
    Rayz2016Rayz2016 Posts: 3,504member
    slurpy said:
    Disgusting. Even more disgusting how many Americans shill for this company, celebrate it, promote it, simply to spite Apple. 
    Well, think about how many Android fans refused to give up their exploding phones just to avoid giving the “sheeple” a point. 
    lkrupplolliverwatto_cobrabadmonk
  • Reply 7 of 12
    k2kwk2kw Posts: 1,214member
    Meanwhile, Apple is paying their taxes lol. 
    So did Apple Pay EU taxes on all the profits they had stashed in Ireland.

    This Samsung guy should have moved to Ireland.
    adm1singularity
  • Reply 8 of 12
    maestro64maestro64 Posts: 4,061member
    in the mean time they just early release the Samsung CEO from jail for paying brides and said his 4 yr sentence was too harsh and the longest sentence for anything like this before, he bribed the president of the country. This is standard operating procedure in Korea, rip everyone off, get catch so the government can say they are doing something about it, put them in jail, let them go so they can do it all over again.

    Samsung is so corrupt top to bottom the company I use to work for would not allow anyone to meet with Samsung management alone. All meeting had to have more than one person and always had to have senior level person in the meeting especially if the meeting took place in Korea. The company was so concern about bribes and stuff.

    edited February 8 watto_cobra
  • Reply 9 of 12
    k2kw said:
    So did Apple Pay EU taxes on all the profits they had stashed in Ireland.

    This Samsung guy should have moved to Ireland.

    First, there is nothing "stashed" in Ireland that should be subject to tax in some other part of the EU, or anywhere else. Apple pays taxes in every nation in which it books any revenue. The reason the vast majority of Apple's European (and Middle East and Africa) Revenue is booked in Ireland is legitimate:

    Ireland is Apple's HQ for that large region of the world. Apple's Ireland operation is not an entity on paper with a PO box; it's a large operation with thousands of local workers, assembling and shipping units of all kinds.

    A. Apple's resellers throughout the region (including their own brick and mortar stores) buy from Apple's Ireland operation at wholesale prices -- Apple Ireland is the supplier. Over the years, a lot of hardware was also sent back there for servicing.

    B. Though Apple's website shows pages with local currencies and local languages, the Apple Online Store sends physical goods out to customers in the whole region from Ireland.

    So, every sale throughout Europe, Africa and Middle East has a large Ireland component since that seems to be the distribution center.

    Secondly, Apple has already paid ALL the taxes that Ireland asked, on ALL the revenue that it booked there; as well as ALL the taxes that any other jurisdiction has asked of Apple on ALL the revenue booked in those locations. Now, however, the EU is pressuring Ireland to levy additional tax, retroactively, because it believes Ireland unfairly enticed Apple to its shores with a deal that Ireland gave no other corporation.

    Thirdly, Apple is the most transparent, financially, of all the large tech companies; and arguably the most forthcoming (gives more numbers and breaks out more things than most of the others). Single P&L statement; doesn't shift things between multiple divisions to make things look good, and all that.

    edited February 8 lolliverRayz2016watto_cobrajony0
  • Reply 10 of 12
    The Samsung Family crime drama is good reality TV.
    Would make a good show for Apple TV productions.
    SpamSandwichwatto_cobrabadmonkjony0
  • Reply 11 of 12
    macseeker said:
    The Samsung Family crime drama is good reality TV.
    Would make a good show for Apple TV productions.
    Could prove to be too scandalous.
    lolliverwatto_cobrabadmonk
  • Reply 12 of 12
    Aw come on. Look at him - like a deer in headlights. This man can do no wrong!! /s
    watto_cobra
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