Posted : 2014-05-06 17:04 Updated : 2014-05-06 19:42
'Yoo used 100 'bogus' firms for embezzlement'
The prosecution has found more than 100 "bogus" companies allegedly used by former Semo Group Chairman Yoo Byung-eun and his family to misappropriate funds and dodge taxes, sources said Tuesday.
Yoo, 73, and his two sons — Dae-gyun and Hyeok-gi — are suspected of having received some 100 billion won ($97.1 million) in "service fees" from these companies.
Many of the firms were set up and are being operated by followers of a religious cult led by Yoo, prosecutors said.
The Yoo family owns a dozen companies, including Chonghaejin Marine, the operator of the sunken ferry Sewol, through a holding firm, I-One-I Holdings.
According to the prosecution, the bogus firms were set up by Yoo's confidents over the past decade. They are paper companies that engaged in transactions only with his firms.
The firms paid Yoo and his two sons for their "consulting services." They even purchased photos taken by Yoo, a self-claimed professional photographer, at high prices.
Through these transactions, the Yoo family has received at least 100 billion won from the firms, prosecutors said.
The latest claims came as investigators are tracing Yoo's money trail.
On Saturday, the prosecution issued a third summons to his second son Hyeok-gi. He is known to be a U.S. citizenship holder, and has rejected the prosecution's summons twice. He reportedly hired a lawyer last week to defend him.
Prosecutors believe the Yoo family created a massive slush fund and is holding hidden assets at home and abroad.
Yoo's two sons are controlling firms through I-One-I Holdings. Yoo has no stake in the holding firm, but the prosecution believes he is the "real" owner.
His lawyer recently denied these suspicions, saying he has been not been involved in corporate management since Semo went bankrupt in 1997. However, prosecutors claim he headed the firms behind the scenes by holding regular meetings with their managers and executives.
Some former followers of the religious cult, named the "Salvation Sect," recently told the media that Yoo appointed CEOs and executives of the subsidiaries.
Yoo's firms have hired mostly the cult's members and their sons and daughters. None of them have open recruitment programs.
He was left with huge debts after Semo collapsed, but was able to found Chonghaejin Marine just two years later, and set up a dozen more firms afterwards. His business empire now spans from media, construction and food to shipping.
Last week, financial regulators raised questions about Yoo's debts. Yoo was able to sign debt-to-equity swaps with creditors after he went bankrupt. Some of his debts were later written off.
In addition, at least four banks, including the state-run Korea Development Bank (KDB), are being examined for their "excessive" loans to the ferry firm and its affiliates.
Prosecutors suspect Yoo might have received help from politicians and government officials in expanding his businesses.