The prosecution on Friday issued an arrest warrant for a CJ Group executive it was detaining for allegedly managing the conglomerate’s slush funds.
The executive surnamed Shin is the first executive to be put in custody in the scandal. He is suspected of having detailed knowledge of its illegal funds and assets held under borrowed names for the group’s chairman Lee Jay-hyun and his family.
The arrest warrant was for tax evasion, the prosecution said.
Earlier on Friday, investigators questioned Shin how he managed the alleged slush funds overseas and kept them in borrowed-name accounts and as investments in paper companies.
He is reported to have led CJ Group’s suspicious business expansion in Hong Kong. CJ Group is suspected of using its Hong Kong-based subsidiaries to purchase overseas real estate with the owner family’s illegal funds and evade tax.
Shin was head of CJ’s Hong Kong division and held a key position in the group’s financial department between 2004 and 2007. Shin was promoted to vice president in 2007 and currently serves as vice chairman of CJ Global Holdings, a parent company of a Hong Kong-based fodder firm and other paper companies in British Virgin Islands, well-known as a tax haven.
In addition, Shin used to work with an accountant surnamed Lee who first revealed the existence of a slush fund in 2008. Shin was Lee’s boss at that time, according to reports. The accountant was said to have managed private funds kept in borrowed-name accounts for the chairman.
By Cho Chung-un (
christory@heraldcorp.com)
