"Heo Jaeho, Forcibly Detained After 7 Years of Absence Following 'Emperor Labor' Controversy"

Secured in New Zealand, to Be Extradited to Korea on the 27th
Repeated Absences from Trial on Tax Evasion Charges

Heo Jaeho (83), former chairman of Daeju Group, who has not appeared in court for seven years after being indicted on charges of tax evasion following the "Emperor Labor" controversy, has been forcibly detained in New Zealand and is now undergoing extradition procedures to South Korea.

He Jaeho, former chairman of Daeju Group. Photo by Yonhap News

According to legal sources on the 27th, the 11th Criminal Division of the Gwangju District Court (Presiding Judge Kim Songhyun) is currently carrying out compulsory detention procedures for Heo, who has been indicted on charges of violating the Act on the Aggravated Punishment of Specific Crimes (tax evasion).

The Gwangju District Prosecutors' Office, which was requested to execute the detention order, secured Heo's custody in New Zealand, where he had been staying, and is proceeding with the extradition process together with officials from the Ministry of Justice. Heo is scheduled to arrive at Incheon International Airport later this afternoon.

Heo was indicted without detention in July 2019 on charges of evading 500 million won in capital gains tax and 6.5 million won in comprehensive income tax on dividends, during the process of selling shares of Daehan Fire & Marine Insurance under an acquaintance's name from May to November 2007. However, after departing for New Zealand in August 2015, he failed to appear in court for seven years, citing heart disease and the COVID-19 pandemic as reasons, resulting in the suspension of his trial.

In addition to this case, Heo is also under police investigation for allegedly embezzling approximately 10 billion won of Daeju Group funds and transferring them to a golf course in Damyang, Jeonnam. Several other lawsuits and criminal complaints are also ongoing against him.

Previously, Heo was indicted in 2007 for evading 50.8 billion won in taxes and embezzling company funds, and in 2011, the Supreme Court sentenced him to two years and six months in prison, suspended for four years, and a fine of 25.4 billion won.

In January 2010, while his trial was still ongoing, Heo suddenly left the country and stayed in New Zealand without paying hundreds of billions of won in fines and taxes. He returned to Korea in March 2014 and was detained in a workhouse at Gwangju Prison.

Former Daejoo Group Chairman Heo Jaeho is answering reporters' questions after being investigated by the Gwangju District Prosecutors' Office in 2014. Photo by Yonhap News

At that time, he was credited 3 billion won against his fine for a total of six days of detention?one day of pre-arrest interrogation and five days in the workhouse?at a daily rate of 500 million won, sparking the "Emperor Labor" controversy. In 2014, the typical daily wage for workhouse labor was about 50,000 won.

As the controversy grew, prosecutors halted his workhouse detention, and Heo voluntarily paid the remaining 22.4 billion won fine.

Daeju Group, founded by Heo, began as Daeju Construction in 1981 and rapidly expanded on the back of a housing boom, at one point recording annual sales of 1.2 trillion won across more than 30 affiliates. However, due to the group's leader's legal risks, the prolonged real estate market slump since 2007, and the global financial crisis, the group was effectively dismantled in 2010.