Korean conglomerates were found to be holding assets worth a total of 5.7 trillion won in tax havens such as the Cayman Islands.

Twenty-four private business groups with over 1 trillion won in assets had overseas subsidiaries in nine tax havens including the British Virgin Islands, Panama, the Marshall Islands, Malaysia’s Labuan, Bermuda, Samoa, Mauritius and Cyprus, according to Chaebul.com, a website that tracks family-owned conglomerates.

The Organization for Economic Cooperation and Development had designated these places as tax havens where certain taxes are levied at low rates or not at all, allowing corporate entities to avoid financial regulations by establishing shell subsidiaries.

The 24 Korean conglomerates had 125 offshore subsidiaries there holding a total of 5.69 trillion won in assets.

Some 2.65 trillion won (18 subsidiaries) of it was held in the Cayman Islands.

Assets worth 1.62 trillion won were held in Panama, followed by 1.1 trillion won in the British Virgin Islands, 267.2 billion won in the Marshall Islands, 66.2 billion won in Bermuda and 18 billion won in Labuan.

By the number of subsidiaries, Panama had the most ― 77 or 61.6 percent ― followed by the Cayman Islands (18), the British Virgin Islands (14) and the Marshall Islands (seven).

SK Group had the largest number of such firms ― 63 including 52 in Panama.

“Most of our offshore subsidiaries are related to the shipping business. It is common in the shipping industry to set up a special purpose company to deal with entities that lend us money to purchase vessels,” an SK Group official said.

“(The business of the SPCs) is revealed on the financial statements and has nothing to do with illegal funds.”

By assets, Hanwha Group’s four subsidiaries held the largest ― 1.68 trillion won ― followed by SK (1.33 trillion won), Daewoo Shipbuilding and Marine Engineering (785 billion won), and POSCO (466 billion won).

“Those offshore subsidiaries are involved in the acquisition of solar energy companies in China and Germany,” a Hanwha official said.

Of the 125 offshore firms, only three were established in the 1990s and the rest after 2003. Thirteen were set up last year and this year.

Seventy-one of the companies had no assets or no revenue as of late last year.

Lotte Group had 12 such firms including nine on the British Virgin Islands which it acquired in 2009.

Hyundai Group had six holding companies and shipping firms; Dongkuk Steel Mill Group had six logistics firms.

STX Group had five including ship leasing firms; Hanwha had four holding companies related to investment in solar energy development; LG, DSME, Hyundai Heavy Industries and Dongwon had three each.

Samsung Group had an electronic goods sales arm and a consulting firm in Panama; CJ Group had two including a movie theater operator on the British Virgin Islands; Dong-a Socio had two securities business firms in Labuan.

Hyundai Motor, POSCO, Hyosung, Mirae Asset, Tongyang, Seah, NHN, S-Oil, GS, Hanjin and Hanjin Heavy Industries also had subsidiaries in the tax havens.

Samsung Group held 353.6 billion won in assets in the tax havens, followed by LG (334.2 billion won), Lotte (206 billion won), Dongkuk (179 billion won), Hyundai Motor (90.7 billion won), Hyosung (73.4 billion won), Hyundai (73.3 billion won) and CJ (53.2 billion won).

A journalist group last week said that it had a list of 245 Korean names suspected of evading taxes by running paper companies in countries or territories that either have very low tax rates or do not impose them at all.

By Kim So-hyun (sophie@heraldcorp.com)