The prosecution on Tuesday questioned CJ Group chairman Lee Jay-hyun over allegations that he amassed massive secret funds in and out of the country for personal use.

Lee, the nephew of Samsung chairman Lee Kun-hee, appeared before Seoul Central District Prosecutors’ Office in southern Seoul at around 9:30 a.m., two days after he was summoned by the investigators.

“I apologize for causing concern to the people, and I will sincerely respond to the investigation,” the chairman said before entering the prosecutors’ office. He was accompanied by his lawyers.

The food and entertainment giant has been under intensive investigation since May for allegedly hoarding secret funds at home and abroad using borrowed-name accounts, ghost companies and fraudulent accounting. The prosecution believes that the alleged illegal activities were led by the 53-year-old chairman and his family. Lee is also suspected of evading 51 billion won ($44 million) in taxes and embezzling 60 billion won in company funds.

Additionally, he is accused of misappropriating another 35 billion won in company funds to buy two buildings in Tokyo and raising millions of dollars in slush funds by purchasing artworks under borrowed names. He is also suspected of hiding massive funds in overseas accounts and illegally purchasing shares of his companies by disguising himself as a foreign investor. Lee allegedly gained profits worth more than 5 billion won through the alleged stock manipulation, according to reports.

The tycoon has been under investigation several times.

In 2008, police revealed that Lee had secretly managed large funds under borrowed-name bank accounts and ordered him to pay 170 billion won in taxes. However, the National Tax Service did not file a criminal complaint against the company at the time. Questions remain as to whether the prosecution will request an arrest warrant against Lee and press charges against him.


By Cho Chung-un
(christory@heraldcorp.com)