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Ex-president’s son accused of establishing paper company in tax haven

Ex-president’s son accused of establishing paper company in tax haven

Posted June. 04, 2013 02:28,   

Updated January. 01, 1970 09:00


Chun Jae-gook, eldest son of former President Chun Doo-hwan, is found to have established a paper company in an overseas tax haven. According to Newstapa, an online news site, the junior Chun founded a paper company called “Blue Adonis” in the British territory of Virgin Islands on July 28, 2004 by registering himself as the lone director. The company was established with 50,000 U.S. dollars in owner’s capital, but in effect it is a typical paper company that only issued a single one-dollar share.

Originally, the junior Chun planned to open an account at the Singapore branch of an Arab bank in the company’s name by Sept. 22, 2004. But notarized documents required for opening a bank account went missing while they were delivered from the Virgin Islands to Singapore. As a result, rumors say that an email message was found suggesting "All the money deposited in Chun’s bank accounts was frozen, and Chun got furious." This makes people to suspect that Chun held large sums of slush funds in unidentified bank accounts, and he needed to hurriedly transfer the fund to a secret account.

Establishing a paper company in itself is not illegal. But it can be hardly understood on what purpose Chun, who runs the publishing company “Shigongsa,” established a paper company. In February 2004, about five months before the paper company was established, prosecution confirmed that 7.3 billion won (6.46 million U.S. dollars) of the slush fund amassed by former President Chun had been transferred to Chun Jae-gook’s younger brother, Jae-yong. In light of various circumstantial evidences, the paper company could be related to former President Chun’s illegal slush funds.

During his presidency, former President Chun was levied 220.5 billion won (195 million dollars) in fine by the Supreme Court on the charge of amassing slush funds worth over 200 billion won (177 million dollars), but he has yet to pay 167.2 billion won (148 million dollars) as of now. After Chun shameless lied in 2003, “My entire wealth is valued at 290,000 won (257 dollars),” secreted property measuring 168 square meters was found in southern Seoul, which was forfeited the next year. Prosecutors recently formed an exclusive investigation team at the Seoul Central District Public Prosecutors’ Office to locate his concealed assets and collect the fine. If prosecutors fail to discover the hidden wealth by October 10 this year, they will have no way to collect it due to the expiration of statutory limitation.

The ill-advised history of the past when a president would amass and manipulate illegal political funds should not be left uncorrected and forgotten. Prosecutors and the National Tax Service should thoroughly investigate to find what the purpose of the paper company is and what the source of the fund that Chun Jae-gook sought to transfer was. Before that, former President Chun and his son should confess the truth and come clean on their own. If they have secreted wealth, they should return every single penny to atone for past mistakes.