Criminal tax investigation opens, raising prospect of prosecution

[National Tax Service]
[National Tax Service]

The National Tax Service has launched a special tax investigation into the South Korean office of a company effectively controlled by Kwon Hyuk, chairman of Sido Group and the country's top individual tax debtor.

The Seoul Regional Tax Service's Investigation Bureau 4 dispatched investigators Thursday to the Seoul office of Sido Shipping in Seocho-gu, where they secured accounting records and other documents, according to industry sources.

The agency is also believed to have obtained a search and seizure warrant from a court after identifying suspected tax evasion — a violation of the Punishment of Tax Evaders Act — by Chairman Kwon, seizing employees' computers and mobile phones.

The execution of a search and seizure warrant signals that the agency has opened a criminal tax investigation with an eye toward potential prosecution, a more aggressive step than a standard tax audit aimed at recovering unpaid taxes.

Kwon founded the ship management firm Sido Mulsan in 1990 and went on to build an active business presence in South Korea, Japan and Hong Kong, earning him the nickname "shipping king."

As of end-2024, however, he had accumulated 393.8 billion won (about $258 million) in personal tax arrears and 520.3 billion won in corporate arrears, landing him on the government's list of habitual high-value tax delinquents. His personal debt ranks first in the country.

National Tax Service Commissioner Lim Gwang-hyeon signed an MOU on information exchange and collection cooperation with his Liberian counterpart on June 5. Liberia, a West African coastal nation, is one of the world's leading ship registry states.

The agreement was widely interpreted as a move to recover unpaid taxes from Kwon, who is suspected of concealing assets abroad through changes in vessel nationality and overseas corporate structures.

President Lee Jae Myung called at a senior staff meeting in March for aggressive action against high-value and chronic tax delinquency, listing it as one of seven "abnormalities" in Korean society that his administration intended to address.

The National Tax Service declined to comment on the investigation into Sido Shipping's South Korean office, saying it "cannot confirm information related to individual taxpayer audits."


oskymoon@heraldcorp.com