A former CJ Group executive suspected of playing a key role in managing a massive slush fund for the conglomerate’s chairman was questioned by prosecutors over a suspicious overseas real estate deal, according to sources Wednesday.
A prosecution probe into the food and entertainment conglomerate has been expanded to include its chairman Lee Jae-hyun, who is suspected of orchestrating the creation of a massive offshore slush fund and tax evasion.
The former chief of CJ’s Japanese operation, surnamed Bae, appeared for questioning at the Seoul Central Prosecutors’ Office in southern Seoul on Tuesday over his involvement in the real estate purchase in Japan that was allegedly financed by the conglomerate’s secret fund, they added.
A real estate manager, Pan Japan, got a loan of 24 billion won ($21.4 million) from a South Korean bank branch after putting up a property owned by CJ Group’s Japanese subsidiary as collateral and purchased a building worth 23.4 billion won in Tokyo’s Akasaka district in January 2007.
Bae, who had served as the chief of CJ’s Japanese operations from 2002 to 2011, was the largest shareholder at the time.
Soon after the purchase of the building, however, Pan Japan was handed over to S Investment, a paper company in the tax haven of the British Virgin Islands. And the shell company’s No. 1 shareholder turned out to be the Hong Kong-based animal feed subsidiary of CJ Group, CJ Global Holdings Ltd, the sources said.
So far, Pan Japan has paid 2.5 billion won in installments, which the prosecution says is a typical method of money laundering, they said.
The prosecution office believes that Bae pretended to be the owner of the real estate firm, Pan Japan, for a short duration as a proxy for the chairman, they said.
Bae, who has once disobeyed the prosecution’s summons citing health reasons, returned home after being summoned for the second time, sources said.
Bae was quizzed over details regarding the change in the No. 1 shareholder and his relationship with chairman Lee, they added. (Yonhap News)
