South Korea's former tax chief arrested on bribery charges

SEOUL (AFP) - A former head of South Korea's national tax agency was arrested on Friday on bribery charges, as the country is reportedly beset by deepening corruption.

Jeon Goon Pyo, 59, allegedly received US$300,000 (S$383,000) in cash and a high-end watch from leading South Korean entertainment and food conglomerate CJ Group in July of 2006, just after he became the head of the National Tax Service (NTS), according to prosecutors.

CJ Group chairman Lee Jay Hyun was indicted for embezzlement and tax evasion in a separate corruption case last month.

Lee, 53, is accused of stashing away undeclared assets worth about 96 billion won (S$109 million) and of evading taxes worth 54.6 billion won since 2004.

Heo Byung-Ik, the former deputy tax chief, has already been arrested for allegedly delivering the bribe in a bagful of US dollars to Jeon.

A third tax official, Song Gwang-Jo, resigned as chief of the NTS Seoul Office on Thursday over allegations that he was treated to luxurious junkets by CJ Group when he was serving as a tax inspector in 2006.

During an audit into the conglomerate in 2006, tax authorities obtained evidence that the group and its chairman allegedly dodged some 356 billion won in corporate and income taxes.

However, the NTS neither collected the unpaid tax nor levied any fines on the family-run conglomerate, according to prosecutors of the Seoul Central District.

The arrests come as South Korea is reportedly facing its highest ever levels of corruption.

The country's Yonhap news agency and other key news media have said South Korea has been surveyed as "the most corrupt of the developed countries in Asia".

They cited a March report from the Hong Kong-based Political and Economic Risk Consultancy (PERC).

With a corruption index of 6.98, South Korea was polled as more corrupt than Thailand (6.83) and Malaysia (5.38) in the survey of foreign businessmen in Asia, according to the report.

South Korea had a score of 4.88 in 2010, but since then corruption in the country has been rising to hit its highest level ever this year, according to PERC.