Seoul ? The Chairman of the Hyosung Group and four other executives have been indicted on charges of embezzlement, tax fraud and violation of commercial law following an investigation by South Korea?s tax officials.
According to the Yonhap News Agency, Chairman Cho Suck-rai is to face charges ?over suspicions of a decade long fraud to cover up losses incurred during the 1997-98 financial crisis?. Hyosung?s operations span several industries including textiles where it is well known for is Creora brand of elastane. It is also involved in construction, industrial materials and power and industrial systems.
?Prosecutors allege that the Group has kept shares under borrowed names since the 1990s to evade transfer and income taxes worth more than 100 billion won (US$94 million),? the news agency said.
Yonhap also states that, ?Hyosung is additionally suspected of establishing shell companies in tax havens in the 1990s with money borrowed from local banks and having made illegal profits by trading shares on the local stock market with secret funds from the offshore paper firms.
?It is alleged that the total fraud could amount to 890 billion won (US$836 million) over a decade from 1999.?
The chairman's oldest son and president of the group, Cho Hyun-join, 45, was included among the five executives indicted, prosecutors said.
Cho Hyun-moon, the second son and a former vice president, however, was excluded from the indictment, as his charges were not proven, they added.
The investigation began in September 2013 when tax officials filed a complaint against Cho and several other executives for allegedly leading the tax evasion scheme.
Hyosung?s operations span several industries including textiles where it is well known for is Creora brand of elastane. It is also involved in construction, industrial materials and power and industrial systems.