CJ Group may have used its Hong Kong-based subsidiaries to purchase overseas real estate with the owner family’s illegal funds, the authorities investigating the group’s slush fund scandal revealed Tuesday.
According to the authorities, investigations have uncovered clues indicating that CJ acquired a 2.1 billion yen ($21 million) building in Tokyo in 2007 through a series of overseas operations.
The investigators also suspect that the transaction was funded with the slush funds of CJ chairman Lee Jay-hyun and his family. Lee and other members of CJ’s founding family are suspected of formed slush funds and engaged in tax evasion schemes using overseas operations.
In connection with the case, the prosecutors on Tuesday summoned former and current executives of CJ E&M and CJ CGV.
The building, located in Tokyo’s Akasaka district, was initially purchased in 2007 by Pan Japan, a real estate management company.
Pan Japan, whose largest shareholder at the time was a man identified by the surname Bae, made the purchase using a 24 billion won ($21.4 million) bank loan backed against a building owned by CJ’s Japan branch. Bae served as the chief of CJ’s Japanese operations from 2002 to 2011.
Soon after the transaction took place the majority ownership of Pan Japan was taken by the British Virgin Islands-based paper company S Investment, whose largest shareholder is CJ Global Holdings, a CJ Group subsidiary based in Hong Kong.
In addition, the fact that CJ Global Holdings is headed by CJ Group chairman’s alleged slush fund manager identified by the surname Shin is fueling suspicions that the real estate purchase was made with Lee’s illicit assets.
From 2004 to 2007, Shin held a key position in the group’s financial department, and is suspected of having detailed knowledge of Lee’s slush funds and assets held under borrowed names.
By Choi He-suk (
cheesuk@heraldcorp.com)
