Tax dodge investigators hit Samsung
Chaebols wobble, but will they fall down?
Samsung Group is being probed for tax evasion by the South Korean authorities as part of the government's plan to stamp down on dodgy financial practices in family-run businesses. The South Korean government is looking into the business practices of a number of the country's chaebols, or conglomerates. It seems that the heads of some of the chaebols are suspected of avoiding paying tax when transferring money to their children. These family concerns in Korea are thought to be lagging behind over reforms to their shady financial practices, and the government has stepped in, the Associated Press has reported. President KimDae-jung last month stated his intention to become the first South Korean leader to get the chaebols on the straight and narrow. He has started his plan via tax audits. The National Tax Service said yesterday it was investigating the dealings of Samsung Group chairman LeeKun-Hee to see if he legitimately bequeathed wealth to his son. This will be the first of many investigations into the conglomerates - which have often been in bed with the previous military-backed governments. It is estimated these organisations may control up to 70 subsidiaries in the country, involved in the car, semiconductor and clothes industries. LeeKun-Hee's son inherited riches of 6 billion won (just shy of £5.5 million) in cash in 1996, and paid 1.6 billion won in tax. The maximum tax rate for inheritance in South Korea is 45 per cent, but apparently this rate is rarely paid by chaebols. Samsung is the country's second largest conglomerate, after Hyundai. ® Related Story Samsung to spend its way to RAM market domination