Prosecutors Probe Chung’s Son for Evading Taxes
SEOUL, South Korea (AP) _ Prosecutors intensified pressure on Hyundai conglomerate founder and presidential aspirant Chung Ju-yung Thursday, probing alleged tax evasion by his son and other executives at a Hyundai subsidiary.
The investigation was viewed as signaling the government’s intent to harass Chung, who has indicated he intends to run for president later this year.
Chung announced last year he was resigning from Hyundai to enter politics. His Unification National Party then stormed into political prominence last month by winning 31 of 299 seats in the National Assembly and contributing to the ruling party’s upset defeat.
Six executives of Hyundai Merchant Marine Co. were questioned overnight at the Prosecutor’s Office. Invesigators said Thursday the six were found to have fabricated documents to evade $36 million in taxes.
Hyundai Merchant Marine is run by Chung’s 5th son, Mong-hun, who will soon be summoned for questioning, prosecutors said. They said Chung Mong-hun is suspected of evading taxes to raise political funds.
″The probe was seen as the start of the government’s all-out pressure on the Hyundai group,″ Hankook Ilbo, a major Seoul newspaper, said Thursday in a commentary.
Earlier this year, the elder Chung, his family and Hyundai subsidiaries paid a record $136 million in back taxes and penalties for alleged illegal stock trading.
Chung’s party emerged as the second-largest opposition force in the March 24 election largely by taking away conservative votes that otherwise would have gone to President Roh Tae-Woo’s party.
A shaken Roh administration has stepped up a campaign to block Chung’s presidential bid.
Last week, bank regulators accused Hyundai Electronics Co. of diverting $4.3 million in bank loans to Chung’s political activity.
On Wednesday, prosecutors said an executive of Hyundai Wood Industries Co. was arrested for illegally dumping polluted materials.
Hyundai officials also assert that the government has pressured banks to cut off credit to the group’s 42 subsidiaries, which produce cars, ships, computers, steel and other industrial goods.