South Korea's National Tax Service has uncovered 615.5 billion won ($448 million) in tax evasion from 27 companies involved in stock market manipulation and unfair trading practices following an eight-month intensive investigation.
The tax agency announced Tuesday that it investigated 27 companies and approximately 200 related individuals from July 2024 through February 2025. The probe resulted in 257.6 billion won in tax collections and 46 criminal referrals, including 30 prosecutorial indictments.
Among the cases, Company A, a machinery manufacturer, disclosed plans for "eco-friendly energy" ventures while funneling nearly 10 billion won to paper companies. Executives created fraudulent lease contracts and fake tax invoices to channel approximately 3 billion won to controlling shareholders. When the sham business plans were exposed, the stock price collapsed to one-third of its value before the company was delisted, leaving retail investors with significant losses. The controlling shareholder reportedly spent the funds on luxury housing deposits and golf club memberships.
In another case, Company B's controlling shareholder gifted shares to children immediately before listing. The stock value surged ninefold in a short period, generating over 10 billion won in gains without paying any gift taxes.
The NTS also identified professional "corporate raiders." One private lender, identified as C, acquired a listed metal panel manufacturer through shell companies, then colluded with stock manipulation groups to pocket over 8 billion won through wash trading. When C's involvement became public, shares plunged more than 60 percent. The agency assessed 7 billion won in taxes against C.
"Tax evasion through false disclosures and tunneling by controlling shareholders damages market trust and harms individual investors," NTS Commissioner Lim Kwang-hyun said. "We will consistently respond firmly to unfair trading-related tax evasion."
President Lee Jae-myung shared the investigation results on X, stating: "This is different from the past. The people's sovereignty government does not make empty promises. The era of profiting from breaking rules and losing from following them is over."