Samsung Chairman Under Investigation For US $4.2 Billion Tax Fraud
Samsung has had an excellent financial year so far. All three of its flagship phones have been received well and performed well in the market. However, organisationally, the South Korean tech giant has had a rough patch. Now, it appears that authorities in South Korea are still going after the family that runs the Samsung empire. Samsung’s Chairman Lee Kun-hee has allegedly used accounts opened under borrowed names to withdraw money from the company and avoid taxation.
The accounts have been used for illegal transfer of wealth from Lee’s father, the founder of Samsung, Lee Byung-chull, and the sum has been estimated around to be $4.2 billion.
Reports suggest that the authorities are looking to tax the money that was illegally withdrawn. According to the country’s Act on Real Name Financial Transactions and Confidentiality, interest and dividend income obtained on borrowed names can be taxed by up to 90%.
This is just one of the many organisational controversies surrounding Samsung’s founding family.
In October, Kwon Oh-hyun, CEO of Samsung Electronics and Samsung Display, vice chairman and head of Samsung’s components division announced his resignation. He will step down from the role as well as his position on the board in March 2018.
In February, Samsung’s vice chairman Lee Jae-yong was arrested in South Korea for charges of bribery and of hiding criminal proceeds and violating laws pertaining to transferring assets abroad.