LA TRINIDAD, Benguet – The Bureau of Internal Revenue (BIR) in the province is investigating the alleged tax evasion committed by a Korean businessman when he reportedly sold majority of his shares in the Cordillera Hydroelectric Power Corporation (COHECO) to a Filipino-owned corporation in the amount of P1 billion plus supposed reimbursements amounting to P300 million.
In his letter to COHECO chief legal and government relations officer Jingboy Atonen, BIR Revenue Officer I Mahicon B. Guimbungan stated that their office was in receipt of an anonymous letter dated October 26, 2016 alleging that Larry Howon Kim, a Korean national, is doing business with COHECO as the chairman of the renewable energy company.
Guimbungan noted that Kim is one of the stockholders of the company and he allegedly financed the initial development of the 60-megawatt run-off-river hydro power plant being built in Cuba, Kapangan.
However, the BIR official said it came to their attention that Kim allegedly sold majority of his shares to a Filipino-owned corporation for roughly P1 billion and he was also reimbursed of his expenses amounting to P300 million.
Based on BIR records, Guimbungan claimed the taxes due to the government on the said transactions have not yet been paid considering that even if Kim is a Korean national, he is still subject to the taxes imposed by the Philippine government which is the same being charged from Filipinos in similar transactions.
“If the allegations of the anonymous complainant were true, the transaction would have been subjected to documentary stamp tax, capital gains tax and income tax on Kim’s profit,” Guimbungan stressed.
The BIR demanded COHECO to produce the shares certificate agreement; board resolution pertaining to the sale of shares, the composition of the Board of Directors before and after the sale of shares, the cost of the project at the time of the sale and the selling price, the stock and transfer book of COHECO, other documents necessary in investigating the case and if the taxes due were paid by providing the proofs of payment for the agency to ascertain whether the complained transaction exists for the same to be resolved the soonest.
Guimbungan pointed out the anonymous complaint that the BIR received is sufficient to formally obtain a letter of authority to audit the concerned parties that were pinpointed in the complaint which is in their possession.
He warned that the failure of the parties to cooperate will compel the agency to resort to administrative and legal remedies as deemed necessary to clothe the agency with authority to force the production of the requested documents and the possibility of elevating the matter for deeper scrutiny and further investigation of all the parties involved.
Kim continues to serve as chairman of COHECO and he is also the majority shareholder of the CohecoBadeo Corporation which is planning to put up a 500-megawatt pump storage hydro power plant in the remote village of Badeo Kibungan.
Herald Express tried its best to get this side of the management of Coheco Badeo Corporation on the said sensitive issue but concerned officials failed to send their reply as of press time.