Hankook Tire owners lose lawsuit, pay $3.5M for hiding assets overseas

Hankook Tire owners lose lawsuit, pay $3.5M for hiding assets overseas

by Sakina Raj

The owners of the sixth-largest tire manufacturing company in the world, Hankook Tire and Technology, has reportedly lost the legal case against a local Korean tax agency over a 4.59 billion ($3.5 million) fine for allegedly hiding some of its assets overseas.

Recently, the Seoul Administrative Court made a ruling against the supposed lawsuit filed by the honorary chairman of Hankook Tire’s parent firm Hankook & Co., Cho Yang-rae, and his eldest son, Cho Hyun-sik, who is also an advisor at Hankook & Co.

In their lawsuit, Cho and his son had argued that it is legal to open a bank account overseas to deposit financial assets as well as profits obtained through investment gains, claiming that they had simply omitted to report financial earnings by mistake, adding that it was not an active attempt to cover up assets.

However, the court ruled that the plaintiff purposefully obscured assets and financial profits, making it impossible for the tax authority to levy and collect taxes.

The court stated that since the 1990, when Yang-rae opened his first offshore account in Switzerland, both Cho Yang-rae and his son opened four more foreign bank accounts as of March 2016. The court further found that none of them were registered with the tax agency.

The court further stated that the plaintiff held no business links to either Luxembourg or Switzerland and that, aside from tax fraud, there was no reasonable purpose for them to have foreign bank accounts instead of domestic ones.

The National Tax Service's Seoul regional office levied income tax and an extra tax on Cho Yang-rae and his son in 2019, claiming that they failed to report profits transferred to offshore bank accounts between 2008 and 2016.

Cho Yang-rae and Cho Hyun-sik were informed by the tax agency that they owed 1.98 billion ($1.4 million) and 2.61 billion ($1.9 million), respectively. The tax levied involves the income tax that the duo should have paid as well as a 40% additional tax as a fine for failure to report income to tax authorities.

Source credit: https://www.koreaherald.com/view.php?ud=20220714000723

Sakina Raj

Armed with a degree in English Literature, Sakina chose to explore the world of content writing and pursue it as a career. Sakina has been playing with words for over five years now and currently pens down articles for Marketprimes and various other online portals relating to diverse domains. Whe Read more...