South Korea’s tax authority carried out a special tax audit on Hankook Tire Co. owned by the son-in-law of former President Lee Myung-bak who is in prison for corruption charges to investigate the group’s illegal trading among affiliates and owner family’s overseas assets.
According to sources on Wednesday, the National Tax Service sent investigators to the headquarters of Hankook Tire in Gangnam, southern Seoul, and seized related materials including accounting books.
Industry watchers believed that the tax authority would look into Hankook Tire Group’s charges on illicit intra-group trading suspected to benefit the owner family. The group’s affiliate Shinyang generates profits entirely by internal transactions with other affiliates including Hankook Tire and Hankook Tire Worldwide Co., the holding entity.
The company is wholly owned by the group’s four owner family members, with Cho Hyun-bum, president of the firm and Lee’s son-in-law, holding a 32 percent stake.
The tax authority is also expected to investigate Hankook Tire Worldwide’s revenue made from trademark royalties that account for 53 percent of its entire sales.
Some speculate the probe may be part of the Moon Jae-in administration’s attempt to clean up the former administration’s infamous legacy.
Shares of Hankook Tire rose 1.44 percent to close Wednesday at 42,200 won.
By Kim Jung-hwan and Choi Mira
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]