StanChart faces heavy taxes in S Korea
Afp, Seoul
South Korean tax authorities have sent bills totalling tens of millions of dollars to a US and a British financial group over the sale of a local bank, a newspaper said Monday. Tax officials are seeking up to 20 billion won (21.7 million dollars) in taxes from US equity fund Newbridge Capital and 45 billion won from British-based banking giant Standard Chartered, the Korea Economic Daily said. Newbridge bought a controlling stake in Korea First Bank (KFB) in 1999 following the Asian financial crisis which devastated the local banking industry. The US fund reaped a massive profit of more one billion dollars on its investment by selling its stake in KFB to Standard Chartered in 2005. Standard Chartered paid 3.4 trillion won to acquire a 49 percent stake in KFB from Newbridge and the remaining 51 percent from the South Korean government. Newbridge did not pay a penny in South Korea by making investments through its unit in a tax haven in Malaysia, which has a treaty on preventing double taxation with South Korea. South Korea revised its tax system last year to levy taxes on foreign investors even if they are registered in tax havens.
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