S. Korea tycoon charged with embezzlement, tax evasion

S. Korea tycoon charged with embezzlement, tax evasion

SEOUL - The head of South Korean food and entertainment giant CJ Group was charged Thursday with embezzlement and tax evasion, prosecutors said, as Seoul seeks to rein in family-controlled business groups.

Lee Jae-Hyun, 53, allegedly stashed away undeclared assets worth about 96 billion won ($108 million) and evading taxes worth 54.6 billion won since 2004.

"This is a case where a business tycoon illicitly pocketed funds diverted from listed companies and evaded tax", Prosecutor Park Jeong-Shik told journalists.

Lee created some 10 shell companies in foreign countries including Singapore and Hong Kong to avoid tax, he said.

Three other former and current executives of the group were also charged as accomplices.

CJ group said the accused accepted the result of the investigation and had apologised.

Lee is a nephew of Lee Kun-Hee, chairman of the Samsung Group.

CJ, which started out as a food company, has been expanding aggressively to other businesses such as entertainment and retail. The indictment comes as the President Park Geun-Hye's government is seeking to prevent all-embracing conglomerates from extending into small retail businesses.

Combined revenue of the group including the country's largest food company and cinema chains amounted to 26.8 trillion won last year.

Business tycoons in South Korea have often got off lightly for their wrongdoing, with courts recognising their contribution to the economy as a reason for leniency.

Lee's uncle, Lee Kun-Hee - convicted of tax evasion - was pardoned in 2009.

Chung Mong-Koo, the head of the country's top carmaker Hyundai, was also pardoned in 2008 after being convicted of embezzlement and other charges.

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