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CJ Group third-gen indicted for tax evasion and embezzlement

The family head of CJ Group, one of South Korea's largest chaebols, was indicted today for tax evasion and embezzlement.

The family head of CJ Group, one of South Korea's largest chaebols, was indicted today for tax evasion and embezzlement.

Third-generation chairman of the food, pharmaceuticals and biotechnology group Lee Jay-hyun, 53, was accused of dodging 54.6 billion won (€37 million) in taxes, and of creaming off 96.3 billion won in company assets to fill a personal slush fund.

Following two months of investigations, he was also accused of building up secret funds at home and abroad worth 620 billion won, and of inflicting 59.6 billion won of financial losses on CJ by fraudulently purchasing two buildings in Tokyo in the company's name.

Further investigations into alleged stock price manipulation are ongoing.

Lee was the first executive to feel the force of new president Park Geun-hye's election pledge to crack down on corruption among the family-owned corporations that dominate South Korea's economy, becoming the first chaebol chief to face prosecution.

He is a grandson of Lee Byung-chull, the founder of Samsung, and is a nephew of current Samsung chief Lee Kun-hee. CJ was originally a division of Samsung but was spun off in the 1990s.

Three former and current executives of the group were indicted alongside him as accomplices, while a fourth who is in China was placed on the South Korean government's wanted list.

Lee is South Korea's tenth richest man, according to Forbes, with a fortune of $1.7 billion (€1.3 billion). He will remain in custody until his trial.  

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