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KBS Chairman to Be Subpoenaed
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JUNE 14, 2008 08:21
The Seoul Central Prosecutors’ Office has been investigating Korean Broadcasting System Chairman Jeong Yeon-joo on suspicion of embezzlement and is expected to subpoena Jeong soon.

A source at the prosecutors’ office said on Friday, “As soon as the fact-finding investigation into KBS’ tax refunds ends, we will subpoena Jeong. It will be within this month.”

Jeong is now under suspicion that he could have received 343.1 billion won back from the government if he had continued the 2005 lawsuit, but only received 55.6 billion won by proposing a balancing act, causing his company a 287.5 billion-won loss.

Prosecutors will investigate Jeong to find out whether the intention of KBS was reflected in the lawsuit back then and whether he knew of the possibility of the company’s winning the case.

Prosecutors reportedly obtained an internal document from the National Tax Service that states, “As KBS is likely to win the case, accepting the offer of KBS, which is coordination, is more beneficial for us because KBS can collect more corporate taxes.”

In response, prosecutors called former and current KBS legal division employees who were involved in the lawsuits to ask about the legal reviewing and responding process at the point when even the accusers suggested balancing with KBS as it would be to the station’s advantage.

Jeong was prosecuted last month for having caused a tremendous loss to his company by ending tax lawsuits that KBS was highly likely to win and using excessive coordination to continue his presidency and make up for the expected financial deficit.

KBS filed a lawsuit against the National District Tax Service to cancel corporate tax on reception fees between 1996 and 2000 and the Seoul Administrative Court ruled that the tax agency should cancel most of the taxes in August 2004.

In response, the tax agency filed an appeal with the Seoul Higher Court but after negotiation with KBS, dropped the lawsuit in January 2006.

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