This article was published on May 6, 2026, at 16:21 on Signal, the capital markets compass.
The Seoul Regional Tax Office's Investigation Bureau 4, which handles special tax investigations, has launched a tax probe into Korea Zinc (010130.KS). Investigation Bureau 4 is an organization typically deployed on a non-routine basis when suspicions of corporate tax evasion or embezzlement arise. With the Financial Supervisory Service (FSS) examining whether Korea Zinc omitted accounting losses, the National Tax Service (NTS) has also launched a special investigation, intensifying regulatory pressure on the company.
According to industry sources on Tuesday, the Seoul Regional Tax Office's Investigation Bureau 4 visited Korea Zinc's headquarters and secured accounting records and other materials for a non-routine (special) tax investigation. Investigation Bureau 4 handles special tax investigations rather than the regular audits typically conducted on a scheduled basis. Although it is part of the Seoul Regional Tax Office, it can also examine companies in other regions through cross-jurisdictional tax audits. The bureau is often dubbed the "grim reaper of the corporate world" as it frequently conducts intensive investigations after detecting illegal tax-related activities and imposes large back-tax assessments.
Regulators are also examining whether Korea Zinc omitted accounting entries. The FSS launched an accounting review of Korea Zinc in October 2024 and escalated it to an accounting audit in November. The review reportedly examines whether losses from the company's prior investment of approximately 560 billion won ($410 million) in the One Asia Partners fund were properly reflected in its financial statements, and whether the valuation of its 580 billion won acquisition of Igneo Holdings was overstated. The circumstances surrounding the advance payment of hundreds of billions of won to the U.S. side in connection with the construction of a U.S. smelter, which has yet to break ground, could also become a point of contention.
Korea Zinc maintains that the probe is a regular tax audit conducted every five years, given its timing. Korea Zinc last underwent a regular tax audit in 2021. However, some observers view the likelihood of a special investigation as high, given that the inquiry is being handled by the Seoul Regional Tax Office's Investigation Bureau 4. A Korea Zinc official said, "We will cooperate sincerely with the NTS investigation."
