Saturday, March 29, 2014

SM Entertainment founder under tax evasion probe

A scandal is brewing at SM Entertainment but this time it's not one of its artists that is involved.
The center of the controversy is none other than Lee Soo Man, the founder of SM Entertainment, the biggest entertainment company in South Korea.

Lee Soo Man (www.newsen.com)

Lee is under investigation by Korea's National Tax Service for allegedly buying mansions and villas in California through the use of a paper company and for tax evasion for allegedly not properly reporting the earnings of its artists from overseas concerts.
The SM Entertainment honcho reportedly bought a Malibu mansion in Los Angeles, California for $4.8 million (P216 million) in April last year, according to a TV report by KBS News.
However, his personal foreign real estate investment limit is $3 million so the remaining amount was covered by Hong Kong-based Polex Development Ltd., which has the same address as that of SM Entertainment in Hong Kong.
In addition, Lee also allegedly bought other real estate properties in Los Angeles worth $2.8 million.
Lee is the richest stockholder in Korean entertainment owning stocks worth 187 billion won (P7.8 billion).
The National Tax Service has launched a special audit on SM Entertainment.
SM Entertainment has denied the allegations.
“When producer Lee Soo Man purchased real estate in Malibu along with POLEX Development, he took all the legal steps to register the real estate purchase abroad and after it was sold, he took the steps to report on the real estate disposal," the agency said, according to ENewsWorld.
The agency added, "At the time of acquisition, he reported on purchasing the real estate to the foreign exchange and tax authorities and transferred the fund by taking legal steps. Therefore, the news report claiming that he illegally transferred his wealth abroad is not true.”
SM Entertainment also belied the report that Polex Development is Lee's personal company.
“POLEX Development, which purchased real estate in Malibu is not Lee Soo Man’s personal company and it is definitely not a paper company that he established,” said the agency.

To contact the author, send email to sangchusan(at)gmail.com

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