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SM chief, Han Ye-seul involved in $120.5 million illegal foreign exchange deals

January 13, 2015

SM Entertainment chairman Lee Soo-man, left, and Korean actress Han Ye-seul

By Kim Jae-won

Family members of conglomerates, SM Entertainment Chairman Lee Soo-man and actress Han Ye-seul have reportedly violated foreign exchange (FX) rules.

The Financial Supervisory Service (FSS) imposed 16 million won ($14,800) in penalties against Chung Kyung-hee, the only daughter of the late Hyundai Group Chairman Chung Ju-yung, KBS TV reported Tuesday, citing the financial regulator.

Chung allegedly bought two luxury houses in Hawaii in 1997 and 2004, but did not report this, according to the report.

Under the Foreign Exchange Law, Korean nationals must report when they buy foreign real estate.

KBS also said Lee bought multiple properties in Los Angeles in recent years, while Han bought a commercial building in the city’s Koreatown area in 2011, but did not report this to the FSS.

The broadcasting company said 44 Koreans committed illegal FX trading involving a combined 130 billion won ($120.5 million).

The FSS reported Samyang Tongsang Chairman Hur Nam-kack and KCC Information & Communications Corp. Chairman Lee Chu-yong to the prosecutors’ office for alleged large-scale illegal FX trading, according to KBS.

The FSS confirmed that it had been investigating this since July 2014, but would not elaborate, citing the ongoing investigation.

“We have collected documents on illegal trading, focusing on purchases of real estate in foreign countries,” said Cho Sung-rae, an FSS director in charge of the FX supervision bureau. “However, it is too early to say more on the matter.”

SM Entertainment and Han both said they failed to report the real estate deals by “mistake.”

“Our American subsidiary made a mistake not to report it to the authority. Other than this, we reported all investments in foreign countries,” a company statement said.

Han also issued a statement through her agency that she made a technical mistake. The agency said Han bought the building, and transferred ownership to a company in which she was the major shareholder, but she did not know that she should report this.

“We are sorry not to acknowledge the regulation and failed to report it on time. However, we did not intend to do so,” said Keyeast, Han’s agency company.