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Gallery head quizzed In CJ slush fund probe

June 20, 2013 - 20:27 By Korea Herald
The head of one of the nation’s prominent art galleries appeared for questioning by prosecutors Thursday over suspicions that she helped CJ Group, a local food and entertainment conglomerate, stash slush funds via deals involving art pieces.

The family-run group has been undergoing an intense prosecution probe over allegations that it created the secret funds worth tens of millions of dollars overseas in such countries as the United States and Indonesia through various methods, and evaded taxes in the process.

Hong Song-won, the head of Gallery Seomi, is under suspicion of assisting the group’s chairman Lee Jae-hyun by inflating the costs or forging papers in the purchase of artwork.

According to prosecution sources, chairman Lee and his family allegedly purchased a total of 138 pieces of famous paintings worth 142.2 billion won ($124.1 million) through Gallery Seomi between 2001 and 2008.

Among the items are high-value pieces by leading contemporary artists such as Andy Warhol and Jeff Koons, they added.

In connection with the probe, the court has approved the prosecution’s request to issue an arrest warrant for a CJ Group executive accused of playing a key role in managing massive slush funds for chairman Lee, prosecutors said.

The vice president, surnamed Kim, of the conglomerate’s Chinese corporate body, is suspected to be fully aware of the size and current situation of Lee’s slush funds both at home and abroad, and the scale of assets kept in borrowed names, they said.

The prosecution office asked Kim twice to appear for questioning, but he has repeatedly disobeyed the summons, prosecutors said.

Prosecutors will soon request the global police organization Interpol to chase Kim, who is currently staying in China, they added. (Yonhap News)