Chapter 428 |
Investigator Shin Jong-hoon's exposé continued.
“For a long time, there have been voices of discontent within the Blue House regarding CEO Kang Jin-hoo. The recent arrest of Chairman Im Jin-yong is also intended to show that political power can overwhelm the power of capital. By decisively punishing the crimes of the chaebol, which they had overlooked until now, they intend to eliminate any future loopholes. In short, the Blue House is afraid of Kang Jin-hoo and is using the prosecution to go on a chaebol-killing spree.”
He continued with other minor revelations, like parachuting appointees into public corporations and meddling in personnel appointments, before concluding.
“This is not all I have to expose. From now on, I will reveal the corruption of this government one by one. My acquaintances worry that I might commit suicide, but I will not commit suicide no matter what happens. If I die, it will be a homicide, not a suicide. Let me say it again, I will absolutely not commit suicide.”
The internet was in an uproar over this revelation.
-So in the end, they arrested Im Jin-yong because of Kang Jin-hoo?
-Seriously, what did Kang Jin-hoo even do wrong?
-It makes sense that the Blue House would be afraid of him.
-Let's be real, whose words carry more weight right now, the president's or Kang Jin-hoo's?
-Kang Jin-hoo is the one who got rid of Park Si-hyeong. There's no law saying the same can't happen to Heo Chang-min.
-Wait, before all that, is what this guy saying even true?
-Tsk tsk, he was being investigated for abuse of power and bribery. You believe a criminal like that?
-It's just a ploy to create an issue and cover up his own crimes.
The police, armed with a warrant, raided the officetel where the video was filmed, but he had already disappeared.
The next day, he sent a text to his wife saying, "Please take care of the family," and cut off all contact.
-What? Did he get 'suicided'?
-Heo Chang-min sent the red Matiz~
-Did the government really kill him?
-Does this even make sense?
-LOL, he exposes the Blue House's corruption, and the left-wing government 'suicides' him. Classic~
-How is this any different from the 5th Republic era?
-No, no matter how stupid the government is, would they really murder a whistleblower in this situation?
-Impeach Heo Chang-min!
The police launched a large-scale search.
Fortunately, he was found in a motel near Silla University. At the time of discovery, charcoal briquettes and a rope were found in the motel room, and it was revealed that he had attempted suicide.
[ (Breaking) Investigator Shin Jong-hoon, Discovered 'Still Breathing' in a Seoul Motel ]
[ Police Arrest Investigator Shin Jong-hoon ]
[ Life Not in Danger, Transferred to Hospital ]
[ Arrest Warrant to be Re-requested as Soon as Condition Improves… ]
The Liberty Korea Party insisted he should be protected as a public interest whistleblower, but the New Politics Party countered that he should be punished for leaking confidential information related to his duties.
In any case, Investigator Shin Jong-hoon was arrested, as the charges against him for his misconduct were solid. As his exposé lacked any concrete evidence, the mood was that it would end as a minor incident.
But, as expected, it wasn't the end.
President Heo Chang-min spoke at a Cabinet meeting.
“Recently, the overseas outflow of corporate funds and offshore tax evasion using tax havens have gone too far. It is only natural that where there is income, there should be taxes. This leads to a sense of deprivation among citizens who pay their taxes faithfully and can provoke tax resistance, so I urge you to thoroughly investigate related matters.”
He then brought up the Panama Papers incident that occurred several years ago.
It was a case where confidential documents from a law firm in Panama called Mossack Fonseca were leaked, revealing the corporations and owners established in Panama and the British Virgin Islands, both famous tax havens.
The list included numerous famous individuals from various countries, including politicians, Hollywood stars, sports stars, entrepreneurs, and criminals, and quite a few Koreans were among them.
This showed how widespread tax evasion using tax havens had become.
After the president's remarks, National Tax Service Commissioner Nam Yoon-sang made an emergency announcement.
“The scale of offshore tax evasion is increasing every year due to companies' expansion abroad and the growth of international trade. The National Tax Service collected an additional 1.4 trillion won two years ago, and 1.8 trillion won last year. For the sake of tax fairness, we plan to conduct high-intensity tax audits if we confirm suspicions of concealed offshore income and assets, regardless of corporate size or whether they are corporations or individuals. We will also increase our manpower to root out hidden overseas assets and offshore tax evasion in the future. We are currently accepting voluntary declarations for unreported offshore income and assets on a temporary basis until the end of the year. Those who voluntarily report may be exempt from additional taxes and fines, and may also receive criminal leniency for crimes such as tax evasion. For any tax evasion discovered after that period, we will apply a zero-tolerance policy in cooperation with the prosecution.”
Keeping in step, the New Politics Party announced its intention to legislate a law strengthening the reporting requirements and punishments for offshore assets exceeding $100,000, under the pretext of preventing capital flight and tax evasion.
***
An official notice from the National Tax Service arrived for me, Taekgyu, and Hyunju-noona. It was a request to voluntarily report our offshore assets.
Taekgyu asked me,
“Why are they suddenly doing this?”
As everyone knew, OTK Company was incorporated in a tax haven.
It's not uncommon to create a corporation in a tax haven for purposes such as anonymity, asset protection, and tax reduction. Up to this point, it's legal, so there's no problem.
The problem is tax evasion and money laundering.
Korea already imposes taxes on the offshore income of its residents. For example, if you buy US stocks in Korea and make a profit, you have to pay taxes not only in the US but also in Korea.
However, it's a bit different for corporations. Korea has no authority to tax the income generated by a foreign corporation. It can only tax OTK Company's funds when they are transferred to me as dividends or salary.
But OTK Company pays almost no dividends and is continuously reinvesting. Therefore, there are no taxes to be paid to Korea.
Industrial capital builds factories on land and employs people. But financial capital can move freely anywhere.
What capital considers important are taxes and regulations.
Panama, classified as a tax haven, has the largest number of merchant ships in the world. Merchant ships, under the principle of "flag of convenience," can be registered where taxes and regulations are low. That's why shipowners register their vessels in Panama, regardless of the country where the ship was built or the owner's nationality.
In the case of the American PEF Lone Star, it established a subsidiary in Belgium and then invested in Korea through it, making enormous profits.
The reason they went through a Belgian paper company was that under the Korea-US Tax Treaty, they would have had to pay taxes in Korea on profits made in Korea, but the Korea-Belgium Tax Treaty is tax-exempt.
Korea moved to tax them, arguing that the Belgian corporation was a paper company and that all investment profits belonged to Lone Star. Lone Star countered that the taxation was unfair, and the issue eventually went to an Investor-State Dispute (ISD).
Other examples include Npple, Gooble, and Facenote. They were caught funneling their profits to Ireland, which has the lowest corporate tax rate in the EU, for the services they sold. The EU responded by threatening to impose billions of dollars in fines, and the IT companies strongly protested.
In this way, fierce battles are being waged between various countries and multinational corporations over taxes.
If OTK Company had been a Korean corporation from the beginning, it would not have been easy to move it overseas. However, OTK Company started in a tax haven from the very beginning. And starting with the proceeds from the sale of Bantcoin, it has steadily grown its assets.
Strictly speaking, apart from the fact that all its shareholders and CEO are Korean, it has little connection to Korea. For them to suddenly act like this...
“Are they really targeting me?”
I recalled President Heo Chang-min, whom I had met before. The deep-set wrinkles and the firmly closed lips. The man I saw was steadfast and upright.
As a lawyer, he cared for the socially weak rather than pursuing personal glory. He was respectable enough in that regard. But being a good person doesn't necessarily make one a good president.
If he believes that controlling the power of capital is justice, what will happen?
Taekgyu said,
“How about we change our nationality?”
For some, nationality is something they get from birth, but for others, it's hard to obtain even with a lifetime of effort. The more developed a country is with a high level of welfare, the stricter the conditions for issuing citizenship.
But money solves all problems. What country would refuse if you offered to bring a year's worth of the national budget with you?
In Korea, ethnicity and nation are one. As the Korean people are the Korean nation, changing one's nationality is treated as a betrayal.
But most countries are a mix of various ethnic groups. China alone has 55 ethnic minorities, and the United States is a collection of all the world's races, so much so that it's called a 'Melting Pot'.
The US willingly accepts naturalized citizens as Americans. Immigrants are also a driving force for America's growth.
An immigrant from India can become the CEO of a trillion-dollar company, and immigrants from Austria and Mexico can become governors. Even a former president's father was Kenyan. (A naturalized American can become a governor, but only a native-born citizen can become president.)
A few years ago, when the French government announced it would impose a top tax rate of 75 percent on the wealthy, many rich people, including the famous actors Depardieu and Alain Delon, renounced their French citizenship and acquired citizenship in other countries.
The richest man in France, LVMH Chairman Arnault, applied for Belgian citizenship but canceled it due to public backlash.
While some public opinion criticizes this, there is also the view that it should be respected as a personal choice. In any case, nationality is seen as being up to the individual's choice.
In the case of other chaebols, it's difficult for them to become naturalized citizens of other countries as their headquarters and businesses are already in Korea, and their dependence on the Korean market is large. The public backlash would also be severe.
But it doesn't matter to me. Since I've even completed my mandatory military service, there's even less to hold me back.
***
I met with Director Kwon Young-cheol again.
Investigator Shin Jong-hoon's exposé, regardless of its truthfulness, was a great help to Seosung Group. Public opinion grew that Chairman Im Jin-yong's arrest was unjust.
“Is the government really doing this because of me?”
He nodded his head.
“I can't say it's solely because of you, CEO, but it's true that the government is feeling a great deal of pressure. The Korean economy right now is basically being driven by OTK Company. If OTK Company didn't exist, what would the current economic growth rate be? According to our economic research institute's calculations, it would have struggled to reach even 2 percent. And that's a figure assuming the government had injected a large supplementary budget. The same goes for diplomatic relations with the US, China, Russia, and Japan. What would it have been like if you weren't here, CEO? Take Japan's trade retaliation that happened last time; whose side would the US have taken?”
In East Asia, both South Korea and Japan are important allies of the United States. But in terms of priority, Japan is arguably ahead.
In fact, when Japan found itself at a disadvantage in the Korea-Japan trade dispute, it launched a massive lobbying effort in Washington, asking them to take their side and mediate.
And it was Ronald who stopped that at my request.
“While you were solving all the problems, CEO, what on earth has the government been doing all this time?”
Taekgyu thought for a moment and said,
“It's true they really haven't done anything.”
President Heo Chang-min had not committed any major wrongs. But he hadn't done anything particularly well, either.
“It was you, CEO, who caught the soaring Seoul housing prices by promoting the Saemangeum development. The government just piggybacked on that success. In short, this government has done nothing. So it's only natural that they are even more conscious of your existence.”
With their chairman in jail, his words were unlikely to be kind.
“It's true that your existence is a great help to the Korean economy. But no government likes a power it cannot control.”
Even the chaebol, who reign above the law, fear the government and the National Assembly. Or rather, whether they actually fear them or not, they at least act like it. That's why they would bow their heads politely at hearings, even when being berated by a much younger lawmaker.
But my behavior was far from that of those chaebols.
“So even if I do nothing, my very existence is a threat.”
Director Kwon Young-cheol nodded.
“If a tiger in the same room says it won't harm you, could you sleep soundly, CEO?”
Money has power just by being accumulated. Who would believe someone who says they won't use it for bad things?
“It's not just a problem with the Heo Chang-min administration. It will be the same even if the administration changes next time. You have become too big a presence for Korea to contain now, CEO.”