KCGI, known for its 'Kangsungbu Fund,' has reportedly been under a special tax audit by the National Tax Service.
According to the financial investment industry on the 12th, KCGI has been under investigation by the Investigation Division 4 of the Seoul Regional Tax Service since the previous day. Division 4 primarily handles special tax audits. It is referred to as 'the corporate grim reaper' for its work in uncovering serious allegations like tax evasion and the creation of slush funds.
Specific allegations under investigation have not been confirmed. However, the industry analysis suggests that the investigation may be looking into not only KCGI's tax evasion allegations but also personal allegations against CEO Kangsungbu.
If specific allegations are confirmed during this tax audit, it could disrupt KCGI's acquisition of Hanyang Securities. KCGI applied for approval to change the major shareholder of Hanyang Securities to the financial authorities last January. Accordingly, KCGI is undergoing a major shareholder eligibility review by the financial authorities. Crimes such as tax evasion are typically disqualifying factors in the major shareholder eligibility review.
KCGI has gained recognition for its shareholder activism against Hanjin KAL, Hyundai Elevator, and DB HiTek. After acquiring Meritz Asset Management (now KCGI Asset Management) in 2023, it signed a stock purchase agreement (SPA) for the acquisition of Hanyang Securities last year, thereby expanding its business.
A KCGI official noted, "There is nothing we can confirm regarding the tax audit."