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| Korea Investment & Securities CEO Jung Il-mun |
The National Tax Service (NTS) is conducting an audit into Korea Investment & Securities after an employee allegedly became involved in a private equity fund (PEF) scandal involving new Justice Minister Cho Kuk and his wife, according to industry sources and the tax agency, Tuesday.
The NTS said the three-month audit initiated in mid-July will continue through October at the brokerage's headquarter on Yeouido, Seoul.
"This is part of a regular audit most large companies are subject to every four or five years," an NTS official said without elaborating further.
The brokerage house also denied that the ongoing tax inspection was related to the allegation
"This is part of a regular audit; nothing more, nothing less," a Korea Investment & Securities official said.
However, the audit is drawing more attention as the firm's private banking center in Yeongdeungpo, southwestern Seoul, was where the prosecution earlier confiscated computer hard disks and key internal documents concerning the assets management of Cho's family.
The confiscation was part of an ongoing investigation into allegations that an official from Korea Investment was involved in illicit investment practices with privileged information provided by then-presidential secretary of civil affairs Cho who had access to such information.
The PEF, in which Cho's family made an investment when the fund was set up, enjoyed a 74 percent return in just about a year. It came after a company, in which the fund had invested, won bids for a number of government construction deals, which many allege were due to Cho's influence.
The prosecution sought an arrest warrant for the official on charges of destroying evidence after he was found to have helped Cho's wife remove a computer from her office.
According to a financial wealth statement submitted to the Government Ethics Committee, Cho's wife, Chung Kyung-sim, an English professor at Dongyang University, has over 2.7 billion won ($2.3 million) held in 18 financial services firms.
Of the total, nearly half, or 1.34 billion won was managed by Korea Investment & Securities.
