South Korea is a sovereign state in the southern part of the Korean Peninsula. It is neighboured by China to the west, Japan to the east, and North Korea to the north. With an estimated population of 50 million, it covers a total area 98,480 square kilometres which includes partially forested mountain ranges separated by deep, narrow valleys. Its main exports are wireless telecommunications equipment, motor vehicles and computers. Korea was one nation under the Goryeo and Joseon dynasties until the end of the Korean Empire in 1910, when Japan began a 35-year period of colonial rule. Japan surrendered to the Allied Powers in 1945 and three years later the country split in two, beginning decades of conflict between North and South. The current president of The Republic of Korea (South Korea) is Park Geun-hye. She is the first woman to be elected as President in South Korea.
South Korea to probe fund transfers to tax havens
Financial regulator to investigate setting up of 245 offshore 'paper' companies since 1995
Bloomberg in Seoul
South Korea's financial regulator said it would start a probe into possible illicit fund transfers after a media group reported it uncovered hundreds of people who opened paper companies in offshore havens.
"We will investigate every one of them," Lee Gyeong-su, an official at the Financial Supervisory Service's foreign exchange team, said. "When doing capital transactions, they are required to report to the authorities prior to the trades, so now we are investigating whether they violated the law."
President Park Geun-hye's government has pledged to crack down on tax evasion to fund her pledges to boost welfare spending. In separate probes, prosecutors on Wednesday searched the home of CJ Group chairman Lee Jay-hyun and tax authorities raided the life insurance unit of Hanwha Group on Thursday.
"This is part of Park's plan to uncover the underground economy and it looks like this is only the beginning," said Kang Byung- goo, an economics professor researching tax reforms at Inha University in Incheon.
"The Park government needs to come up with 135 trillion won (HK$927 billion) during her term to finance welfare and other pledges made during the presidential election."
The Korea Centre for Investigative Journalism said on May 22 that it found 245 South Koreans established paper companies in tax havens including the British Virgin Islands and Cook Islands from 1995 to the end of 2009.
The names released so far by the news organisation haven't included executives from Hanwha Life Insurance and CJ Group.
Among those that have been identified are executives of Samsung Group, Hanjin Shipping and a former executive at Daewoo International.
The Hanjin executive ended the relationship with the paper company in November 2011, according to a statement from the shipping firm.
Daewoo International has no documents or records related to the company mentioned, it said.
Park has promised to usher in a "People's Happiness Era", and raise the middle class to 70 per cent of the 50 million population, from 67.7 per cent. Pledges include funds to help prevent loan defaults by people on low incomes. Her father, the dictator Park Chung-hee, had backed the family-controlled industrial groups referred to as chaebol.