The National Tax Service (NTS) launched a special tax investigation on Daewoo Shipbuilding and Marine Engineering (DSME). The last time it conducted a periodic tax investigation was four years ago, in 2010.
NTS dispatched its investigators to DSME’s Headquarters building in Jung-gu and DSME’s other building in Gangnam-gu on June 24. On June 26, it began investigations into the shipyard in Geoje, Gyeongnam Province as well.
Investigation Group 4 from the Seoul Regional Tax Office was dispatched for this operation. Investigation Group 4 is comparable to the Central Investigation Headquarters of the Supreme Prosecutors’ Office, and when it gets a scoop on corruption, the investigation begins under the command of the Chief of the NTS.
DSME dismissed the possibility of a special investigation by saying, “This investigation is periodic,” but the financial sector does not believe it. Last February, the NTS had announced that it’s not going to conduct a tax investigation on industries like shipbuilding, marine transport, and construction that are going through tough economic times.
A source from the financial sector said, “The investigation by Group 4 is serious,” implying that the nation might soon be shocked by the scale of the corruption it finds this time.
Every year, DSME has been the center of some kind of corruption scandal. Recently, executives and staff illegally snagged valuables from subcontractors. It also recorded much-less-than-expected performance in the 1st quarter of 2014, and Russia’s LNG carrier project is not making any progress. DSME’s 2nd quarter performance is now doomed to plummet as well.