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The former Star Tower Building, now called Gangnam Finance Center
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The National Tax Service has launched a fresh probe of the U.S. private equity fund Lone Star, this time over the sale of its stake in Kukdong Engineering & Construction and StarLease. Lone Star said NTS officials carried out a 13-hour raid of its office in Yoeksam-dong, Seoul, on Wednesday. They seized documents on the sale of Kukdong Engineering & Construction, the company said.
This is the second tax probe of Lone Star since 2005. After the 2005 investigation, the NTS slapped Lone Star with W140 billion (US$1=W941) in fines and additional taxes for profit gained from the sale of the Star Tower Building in Seoul. In the latest probe, the NTS hopes to review ways to tax the offshore fund for its gains of W1.5 trillion from the sale of stakes in Kukdong, StarLease and Korea Exchange Bank.
But Lone Star chairman John Grayken told Reuters his firm owed no Korean taxes on recent deals here, citing a dual taxation treaty between Korea and Belgium, where Lone Star's subsidiaries for global mergers and acquisitions are based. ¡°While we are disappointed by yet another unannounced raid of our offices, we are committed to cooperating fully with their investigation,¡± he said.
(englishnews@chosun.com )
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