select languages
Business_titleIndustryEconomyMarketlmenu_bottom
FocusFocus Focus
mostview_topstock
mostview_bottom
latestnewslatestnews RSS
Market
Home > Business > Market
Cayman Islands' investment in S. Korea tops 7.7 tln won
SEOUL, May 27 (Yonhap) -- The Cayman Islands is the largest investor as a tax haven country in the South Korean market, data showed Monday, amid growing suspicions here that some of the money belongs to rich Korean nationals disguised as foreigners running off-book accounts.

   The amount of investment by the British overseas territory in local stocks and bonds reached 7.7 trillion won (US$6.82 billion) at the end of April, with the number of investors standing at 2,796, according to the data by the Financial Supervisory Service (FSS).

   Their value of equity holdings came in at 6.5 trillion won, or 1.6 percent of the total securities investment by foreigners, with the corresponding figure for bonds standing at 1.85 trillion won, or 1.1 percent of the total, the data showed.

   Cayman Islands investors made up 7.7 percent of all offshore investors participating in the local market, and they are the third largest group after the United States with 12,163 and Japan with 3,444, the FSS said.

   The revealing data came amid evolving speculation here that such offshore accounts are used by high-profile Korean businessmen and their families as a means to avoid taxes or stash away massive amounts of slush funds.

   A non-profit journalists' organization last Wednesday disclosed a list of three names of heads of family-owned conglomerates, known here as chaebol, who have set up a paper company in the British Virgin Islands and the Cook Islands, two other well-known tax haven regions.

   The independent journalists' group is scheduled to release its second lot of suspected tax evaders on Monday, in what could unleash further controversy over possible irregularities in large firms' overseas accounts.

   The move also came after the prosecutors' office launched an extensive probe into allegations that owners of CJ Group, the 14th-largest conglomerate in South Korea, have engaged in organized tax evasion activities through funneling huge amounts of secret money to their offshore accounts in Hong Kong and the Virgin Islands.

   To be in step with the law enforcement authorities, the FSS began its own investigation to see if any local company had manipulated stock prices in the Seoul market by pretending to be foreign money based in a tax haven country.

   Foreign-led stock price rigging can deal a serious blow to the local market since their holdings account for more than 30 percent of the total market capitalization, leading to market volatility.

   elly@yna.co.kr
(END)
HOMEtop