Hyundai Founders Fined $181 Million

The founding family of the Hyundai conglomerate was ordered Friday to pay a record $181 million for alleged illegal stock dealings aimed at evading inheritance taxes.

In a separate announcement, the National Tax Administration belatedly disclosed that Cho Jung-hoon, chairman of Korean Air, was forced to pay $68.6 million in penalty taxes early this year for illegal stock transfers to a son.

There was no official explanation of the delay in announcing the Korean Air case.

The actions by the conservative government of President Roh Tae Woo, which faces elections next year, are part of an effort by tax officials to force wealthy Koreans to pay their fair share of taxes.

The government recently said it would audit taxes of conspicuous consumers making repeated trips abroad and spending lavishly at home.

Hyundai founder Chung Ju-yung, 75, and nine members of his family illegally traded a huge amount of stock among themselves without going through the official Korea Stock Exchange, the Tax Administration announced after a three-week probe.

The stock dealings appeared to be aimed at evading inheritance and succession taxes, which have rates as high as 60%, officials said.

Because of the Hyundai penalty’s size, a complex legal battle between the government and Chung is expected.

Some newspapers speculated that the government’s tax probe might be a political retaliation against Chung, who publicly blamed the government for Korea’s snowballing trade deficit, which surpassed $10 billion in early October.