The National Tax Service announced on the 27th that it would start a tax investigation on eight construction companies that received public housing land through a ‘swarm bidding’ that mobilizes several disguised construction companies. These construction companies are accused of evading taxes by transferring housing land at a low price to a corporation controlled by the children of the owner. On the 26th, following the Ministry of Land, Infrastructure and Transport announced measures to block the bidding of bee swarms, it is analyzed that the National Tax Service also took action.
The National Tax Service announced that it has launched an investigation into 32 tax evasion suspects of three types: monopolization of real estate development profits, abuse of superiority, and illegal inheritance of wealth. Eight of them were tax evasion suspects who monopolized profits from real estate development, and the National Tax Service official explained that many of them received public housing land through a swarm of bees bidding. Oh Ho-seon, head of the National Tax Service’s investigation bureau, said in a briefing, “The owner family monopolized the real estate development profits in such a way as to undermine the market competition order by bidding swarms of bees, and corporate taxpayers who monopolized public housing land participated in the company controlling the stock ownership as the construction company.” “Some corporations monopolized public housing land through bee swarm bidding, encouraging housing prices to rise, and as a result, negatively impacting the economy of people’s livelihoods,” he pointed out.
According to the case disclosed by the National Tax Service, the owner of Company A, the construction company, made a swarm of bees bidding with affiliates to allow Company B, which is controlled by her underage children, to acquire public housing land. Then, Company B succeeded in selling apartments twice, and in the process, Company A provided services for the apartment construction carried out by Company B at a low price. The value of Company B’s stock has risen 200 times compared to when the children of the four shareholders received the gift five years ago.
In another case, the developer company C gave up on the project following winning the bid for the public housing site through the bee swarm bidding, and transferred it to the developer company D, which is controlled by the children of the owner, at a low price. Company E, a contractor controlled by a child, carried out the construction, and the children of the owner took a monopoly on the sales revenue of the developer and the construction income of the contractor. The National Tax Service has decided to stipulate this as a de facto job, and to collect tens of billions of won in gift tax, etc.
In addition, various cases have been discovered, such as handing over information on large-scale development projects promoted by affiliates to their children to acquire related stocks in advance, or paying large salaries while disguising as if their spouse, a full-time housewife, is going to work. Eleven people who privatized corporate assets and diverted corporate profits were also included in the investigation. The amount of luxury assets discovered by the owner following purchasing a supercar or a luxury villa under the corporate name reached 174.8 billion won.
Reporter Do Byung-wook [email protected]