[Exclusive] SK's mysterious V Project

[Anchor]

This is the current governance structure of SK Group.

Chairman Chey Tae-won controls the group through the holding company SK Holdings.

If we turn the clock back 10 years, there was another company called SK C&C above the current holding company.

It was the company responsible for IT work for SK affiliates, and it was a 'core' company with over 40% of shares held by Chairman Chey.

To untangle this 'nested' structure, the two companies merged in August 2015.

The problem was the shareholding ratio.

Before the merger, Chairman Chey's stake in SK Holdings was less than 0.5%.

The plan was to increase the corporate value of C&C before the merger so that Chairman Chey's control would strengthen after the merger.

Shall we take a look at a KBS report from around that time?

There was a reason why affiliates continued to give work to C&C despite the controversy.

KBS also investigated a suspicious project between SK Telecom and C&C that appeared to be another form of 'favoritism'.

Reporter Hwang Hyun-kyu has the exclusive report.

[Report]

On December 10, 2013.

The contract management team of SK C&C sends an email to the project management team.

The subject reads, 'Additional outsourcing purchase after invoice issuance.' They request a 'risk review' for the 'V Project' to optimize financial costs ordered by SK Telecom, asking to add to the contract amount.

They also urge that it be conducted only with in-house personnel without external staff.

The mysterious 'V Project' repeatedly appears in C&C's budget system.

After much inquiry, KBS met with an employee who was involved.

[Employee involved in the project/voice altered: "(I remember) the contract amount was around 400 million, but it was said to change to over 800 million, and towards the end of the project, I was contacted, and the contract just increased without any actual resource input."]

This explanation suggests that they exaggerated the work done or increased the contract amount without actually doing the work.

Other employees at the time also raised issues about the way work was handled.

"There are risks," "There could be tax issues," and "I can't participate," they said.

[Employee involved in the project/voice altered: "They were registering a large number of non-existent projects. Dozens of them were listed. This is 'fictitious trading'...."]

An analysis of over 20,000 internal documents from C&C between 2013 and 2015 confirmed that in 204 contracts ordered by SK Telecom, the contract amounts were inflated after invoice issuance.

As a result, SK C&C billed Telecom an additional 168.7 billion won.

This means that the revenue of C&C, which is key to strengthening Chairman Chey's control, increased by that much.

It is also notable that one employee oversaw more than ten projects annually.

[Employee involved in the project/voice altered: "For a large project, you do one a year. You can't handle 2-3 at the same time."]

The V Project and others ended in January 2015, and three months later, the merger between C&C and SK Corporation was announced.

[Employee involved in the project/voice altered: "After the merger, there were no more fictitious transactions."]

SK stated, "It was over ten years ago, so it's hard to verify the facts," but added, "It wouldn't have made sense to fabricate fake work since we were preparing for a merger at that time."

KBS News, Hwang Hyun-kyu.

[Anchor]

There are also suspicious traces.

A ghost department that is not listed in the organizational chart was responsible for contracts worth over one billion won.

The National Tax Service, which is auditing SK Telecom, has also confirmed these issues and is considering reporting them to the prosecution.

This report is brought to you by reporter Song Soo-jin.

[Report]

[SK C&C promotional video/2013: "We provide optimal IT services to our customers based on the highest level of manpower."]

The problematic project transaction structure is the same.

SK Telecom places the order, and C&C receives the work.

After C&C completes the work and submits a completion report, Telecom must inspect it and pay the costs.

However, the 'V Project' and others were different.

It is suspected that the money was deposited first, and then the completion report was created.

The report was fabricated to make it seem like actual work was done, according to statements from C&C employees at the time.

[Employee involved in the project/voice altered: "I thought I shouldn't participate in illegal activities, so I replied via email that 'I can't do it.']

The responsible department was the 'Application Development Team.'

We checked C&C's organizational chart, but there was no trace of it anywhere.

SK explained, "It was a department not on the organizational chart, but it was a temporary TF department," but other TF departments were listed on the organizational chart at that time.

The Seoul Regional Tax Office's Investigation Division 4 has also secured the same materials and statements.

They are investigating the allegations of fictitious trading, or 'fake work.'

The National Tax Service has reportedly determined that they received undue refunds for value-added tax based on fake invoices amounting to at least several hundred billion won.

[Ahn Soo-nam/Tax accountant: "(For fake work), the deducted value-added tax is subject to recovery, and corporate tax is also subject to recovery... Considering it as an improper method, the additional tax alone would be 40% each."]

SK stated that there was no organized directive at the group level to inflate sales.

The National Tax Service is considering reporting to the prosecution for document forgery, separate from the tax evasion allegations, based on the fabricated transaction materials.

KBS News, Song Soo-jin.